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Keynote AHFE HSSE 2012 Conference in San Francisco, Human Side of Service Engineering

Keynote AHFE HSSE 2012 Conference in San Francisco, Human Side of Service Engineering

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  • Reference content from this presentation as: Spohrer, JC (2012) The Human Side of Service Engineering & Smarter Planet Association of Human Factors & Ergonomics & HSSE 2012 San Jose State University, San Jose, CA, USA, Sunday July 22, 2012 Permission to redistribute granted upon request to spohrer@us.ibm.com This presentation is available for download at: http://www.slideshare.net/spohrer/isss-service-science-reframing-skeleton-progress-20120717-v2 From the Paper: Service Science: Reframing Progress With Universities Spohrer, Giuiusa, Demirkan, Ing
  • Today’s Talk NSF NBIC graphic – Converging Technology Service Science Handbook graphic
  • Sources: Porat, M. (1977) The Information Economy: Definitions and Measurements, Special Publication 77 12(1), Office of Telecommunications, US Department of Commerce. Book picture: http://images.amazon.com/images/P/0631211020.01.LZZZZZZZ.jpg Author picture: http://images.google.com/imgres?imgurl=www.cso.edu/ancien_site/march_portrait.jpg&imgrefurl=http://www.cso.edu/ancien_site/march_bio.htm&h=270&w=250&sz=8&tbnid=eAHBA8fmVlUJ:&tbnh=108&tbnw=100&start=5&prev=/images%3Fq%3D%2522James%2BG.%2BMarch%2522%26svnum%3D10%26hl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26safe%3Doff Book text: http://www.amazon.com/exec/obidos/tg/detail/-/0631211020/qid=1077242349/sr=1-1/ref=sr_1_1/103-3454405-6368663?v=glance&s=books Time Line: http://www.pbs.org/wgbh/amex/telephone/timeline/f_timeline.html Farm Labor: http://www.usda.gov/history2/text3.htm Brief History of Work: http://courses.nus.edu.sg/course/socsja/SC2202/Labor/Occupationsa.html 1800 and the Jeffersonian ideal – citizens as independent and self sufficient 1800 – mobile people called settler (move and stay), conquerors (come in to rule), or sailors (come from afar to trade), changed by 1900 to include travelers -- local travel to family, on business, leisure, schools, medical, government or military service.
  • For business, you need people – so bring on the people…. I manage a small group of about 65 people and 20 million dollars Sam Palmisano manages 330,000 people that spends $5B on R&D alone. Chart: 6 Billion Human Beings: An exhibit from the Musée de l'Homme Muséum National d'Histoire Naturelle, Paris –France http://www.popexpo.net/english.html Book Picture: http://www.amazon.com/gp/reader/0767904028/ref=sib_dp_pt/103-3454405-6368663#reader-link Book Text: Author Picture: Quote test: http://news.nationalgeographic.com/news/2002/06/0627_020628_wadedavis.html Book Picture: http://www.amazon.com/gp/reader/0674940520/ref=sib_dp_pt/103-3454405-6368663#reader-link Book Text: http://www.amazon.com/exec/obidos/tg/detail/-/0674940520/qid=1077018927/sr=1-1/ref=sr_1_1/103-3454405-6368663?v=glance&s=books Author Picture:
  • We all know that economists have been reporting on the growth of the service economy for the last century… Over the last two hundred years, the US has shifted from agriculture to manufacturing to service jobs, as dominant. The growth in service jobs parallels the growth of the information economy, and many of the jobs are knowledge-intensive, including finance, health, education, government, B2B, etc. Developed and emerging markets are seeing the same shift – this is a global trend. What was clear was that all developed and emerging market nations where shifting to service economies due to increasing use of technology in manufacturing and agriculture (productivity increases), and increasing use of information technology in traditional service areas, including utilities, building maintenance, retail & hospitality, finance, health, education, and government – making the service sector more knowledge-intensive and requiring more technical skills. As well as more outsourcing, leading to more B2B service. In the back-up slides we introduce the concept of product-service-systems to better understand the way the global economies are evolving… ServicesOLD= Not Natural or Manufactured Products (Negative) ServiceNEW = Applying Knowledge/Resources to Benefit Customers/Stakeholders (Positive) Why does outsourcing the jobs or changing the business model (e.g., leasing, mass-customizaton) cause the category to change? It shouldn’t, modern farms and factories are service systems too… See the following papers… Vargo & Lusch (2004) Evolving to a New Dominant Logic for Marketing. Journal of Marketing. Tien & Berg (2006) On Services Research and Education. Journal of Systems Science and Systems Engineering. Two ways the Firm can think about the world: Firm – can I think of things my customers want to own, and how can I make and sell those things. Firm – can I think of ongoing relationships/interactions with my customers and their stakeholders, and how can I establish and continuously improve those interactions in a win-win manner Fact: Service growth in “national economies” All nations are experiencing a macro-economic shift from value in producing physical things (agriculture and goods) to value from apply capabilities for the benefit of others (services). Observation: Service sector is where the job growth is, not only in the US but around the world. Implication: Most science and engineering and management jobs will be in the service sector. For example, Kenneth Smith of H.B.Maynard (one of the oldest and most prestigious industrial engineering consulting firms) said - “Historically, most of our business at H.B. Maynard was manufacturing, today roughly 80% is in the retail sector…” So why do we still train most scientist and engineers for manufacturing age jobs? Could this be part of the reason that in most US engineering schools only 50% of entering engineering students graduate with an engineering degree? The service sector is the fastest growing segment of global economies. In the US, in 1800 90% of people were worked on farms, and today less than 3% of workers are employed in agriculture. Goods, or manufacturing of physical products, peaked in the US in the mid-1950’s and has been decreasing ever since due to automation and off shoring. However, services, especially complex information and business services, as we will see is where the growth is. But the growth in the service sector jobs is not just in the developed countries, it is also happening in the developing countries. In fact, the International Labor Organization, reports that 2006 was the first time in human history that more people worker in the service sector than in agriculture world wide. 40% in service sector, 39.7% in agriculture, and 21.3% in manufacturing, with the growth coming by moving people from agriculture to services – this represents the largest labor force migration in human history. 1970 estimates % of service in labor force (change to 2005/2009 est) China 12 +17 142% India 17 +6 35% US 62 +14 23% Indonesia 29 +10 34% Brazil 41 +25 61% Russia 42 +27 64% Japan 48 +19 45% Nigeria 16 +3 19% Bangledesh 19 +7 37% Germany 45 +19 42%
  • What you may not know is that manufacturing companies are also seeing a growth in service revenue… from financing to maintenance to customer support services, because of the growing complexity of products… IBM has seen its service revenue grow, and lead the growth of IBM in the last two decades. In the last two decades the growth was B2B, in the coming decade it will be B2G service growth – powered in part by shared service across government and cloud computing… Fact: Service growth in “manufacturing” businesses 2008 GTS 40 (39.2) GBS 20 (19.6) SWG 22 (22.1) S&T 20 (19.2) FIN 2 (2.6) Total 103.6B Profit 45.6% 2010 GTS 38.2B GBS 18.2B -> 56.4B HW 18.0B SW 22.5B FIN 2.2B -> 42.7B Source: http://www.fiercecio.com/press-releases/ibm-reports-2010-fourth-quarter-and-full-year-results-nyse-ibm-q4
  • The evolution of service science is to apply service science to create a Smarter Planet. What is smarter planet? A smarter planet is built out of many harmonized smarter systems, systems that are instrumented, interconnected, and intelligent (data, models, and analytics software are used to make better decisions) The world is instrumented meaning everything has computers, cameras, gps or other sensors – cars, stop lights, signs, roads, hospitals, retail stores, rivers, bridges, etc.. The world is getting more and more interconnected. If we could capture the right data and analyze it, we can make our planet smarter. IBM has been working on cleaning up pollution in Galway Bay, Ireland. The marine scientists told the IBMers that the mussels in the water close their shells when something bad enters the water. So IBM put sensors in some of the mussels and connected the sensors to an alert system and visualization system. When a pollutant enters the water, the mussels shut their shells, the sensors sends an alert and water management officials begin to take action to clean it up. Over time, they realize that a particular ship may be coming into the bay every other Tuesday, causing the problem, and they can go after the ship company to not drop pollutants or to find another way to rid of waste. This optimization takes place with other causes of the pollutants.
  • Researchers at University of Cambridge hosted industry and academic service researchers to create a framework for service innovation success… The framework is outlined in five columns – service innovation is the priority, we need to study service systems and networks, we call this study service science, and multiple stakeholders have to align to advance service science, and double investment in service research and education by 2015. You can read the complete report at the following URL: http://www.ifm.eng.cam.ac.uk/ssme/ To ensure we are making progress, we need to see how much government, academia, and industry are investing in service research and innovation. IfM and IBM (2008). Succeeding through service innovation: A service perspective for education, research, business and government. Cambridge, UK: University of Cambridge Institute for Manufacturing.
  • Researchers at Arizona State University in the US recently surveyed service researchers from around the world to create a research priorities framework for service science. You can read the executive summary at the following website: http://wpcarey.asu.edu/csl/knowledge/Research-Priorities.cfm You can read the complete article in the Journal of Service Research… Ostrom, AL, MJ Bitner, SW Brown, KA Burkhard, M Goul, V Smith-Daniels, H Demirkan, E Rabinovich (2010) Moving Forward and Making a Difference: Research Priorities for the Science of Service. Journal of Service Research. 13(1). 4-36.
  • The reasonable questions: What is a service system? What is service science?
  • High school drop out rates in cities can be high… by increasing focus on system of systems in all grade levels, especially STEM discussions of how to study and then propose solutions to local community challenges – there is evidence that exemplar programs increase the diversity and desire of students to go onto college in STEM areas, and then go on to jobs that use these skills to improve systems…. A number of NAE studies as well as NMC study on challenge-based learning provide encouraging information – also IBM has a Smater Learning white paper which confirms some of these findings. http://www.ibm.com/ibm/ideasfromibm/us/smartplanet/topics/educationtechnology/20090601/index1.shtml See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning Smarter Planet University Jam Final report at: https://www.ibm.com/developerworks/university/smartplanet_jam/ Awards given to top participants, e.g., faculty and students… Prizes as Incentives for Public-Private Partnerships In recent years, there has been a renaissance in “incentive prizes” – which reward contestants for achieving a specific future goal. http://blog.ostp.gov/2009/06/17/prizes-as-incentives-for-public-private-partnerships/comment-page-2/ crowd-sourcing the world.... see http:// www.itsa.org /challenge/ WE are smarter than ME, i.e. and a diversified, independent, decentralized community can outperform even the greatest of experts. This challenge is open to entrepreneurs, commuters, transportation experts, researchers, universities, students, scholars, scientists and citizens from all fields around the globe. All ideas will be reviewed discussed and rated by an open global community, to determine the best and most creative ideas to effectively solve the consequences of traffic congestion. The winner will be announced during the 16th World Congress on Intelligent Transportation Systems in Stockholm, Sweden, September 21 - 25, 2009, and will receive a cash a of $50,000 USD , as well as development and implementation support to pursue turning the ideas into real-world solutions. Ideas will be reviewed, discussed and rated by an open global community. The public will determine the best and most creative ideas to effectively solve the consequences of traffic congestion. The winner will be chosen by the community. For the next 60 days the community (which anyone can join ) will review and rate all submissions on 5 criteria. On August 1st, the top 9 solutions will be announced. These 9 will then submit more information including a slideshow, a video and founder bios. Based on this information, the participating community members can decide who they each want to back. Each member allocates points they have earned through what is known as a predictive market. The overall winner is the solution that receives the most backing. This challenge truly is: for the people, by the people, and decided by the people.
  • Our world is composed of planetary systems (our natural environment) and human systems (our social environment). We obtain benefits from both types of systems. We also interact with and contribute to both types of systems. Our choices (such as diet and resource usage) impact planetary systems, and our choices (such as education and jobs) impact human systems. It is really our opportunities and choices that matter. And our choices today will have an affect on our opportunities tomorrow. A smarter planet is about maintaining and improving our quality of life in a sustainable manner – meeting our short-term needs without jeopardizing future generations.
  • As we think about the future of cities and universities, as an optimist, I see future cities and universities better than they are today… what IBM calls a Smarter Planet is such a vision -- today cities and universities sustain our high quality of living on the planet -- we believe they do an even better job in the future – in future cities and universities, we can all do a better job of applying, creating, and transferring knowledge generation over generation… http://www.measureofamerica.org/docs/APortraitOfCA.pdf In a recent survey of young Californians, 90% said internet access was essential for a high quality of life, and 50% said access to a smart phone was essential for a high quality of life. Some would say that the middle-class person today lives better than king’s did a thousand years ago… perhaps that is true in terms of material comforts… and in 1836 Nathan Rothschild the richest many in the British Empire, perhaps the world died of an infected abscess… http://en.wikipedia.org/wiki/Nathan_Mayer_Rothschild By the time an infected abscess caused his death in 1836, his personal net worth amounted to 0.62% of British national income.
  • What improves quality of life? Service system innovations. Every day we are customers of 13 types of service systems. If any of them fail, we have a “bad day” (Katrina New Orleans) I have been to two service science related conferences recently, one in Japan on Service Design and one in Portugal on Service Marketing… the papers from the proceedings of the conferences mapped onto all of these types of service systems… The numbers in yellow: 61 papers Service Design (Japan) / 75 papers Service Marketing (Portugal) / 78 Papers Service-Oriented Computing (US) Number in yellow Fist number: Service Design Conference, Japan 2 nd International Service Innovation Design Conference (ISIDC 2010), Future University Hakodate, Japan Second number Service Marketing Conference, Portugal, AMA SERVSIG at U Porto, Portugal Numbers in yellow: Number of AMA ServSIG 2010 abstracts that study each type of service system… (http://www.servsig2010.org/) Of 132 total abstracts… 10 studies all types of service systems 19 could not be classified In a moment we will look at definitions of quality of life, but for the moment, consider that everyday we all depend on 13 systems to have a relatively high quality of life, and if any one of these systems goes out or stops providing good service, then our quality of life suffers…. Transportation, Water, Food, Energy, Information, Buildings, Retail, Banking & Financial Services (like credit cards), Healthcare, Education, and Government at the City, State, and National levels…. Volcanic ash, hurricanes, earthquakes, snow storms, floods are some of the types of natural disasters that impact the operation of these service systems – but human made challenges like budget crises, bank failures, terrorism, wars, etc. can also impact the operation of these 13 all important service systems. Moreover, even when these systems are operating normally – we humans may not be satisfied with the quality of service or the quality of jobs in these systems. We want both the quality of service and the quality of jobs in these systems to get better year over year, ideally, but sometimes, like healthcare and education, the cost of maintaining existing quality levels seems to be a challenge as costs continue to rise… why is that “smarter” or sustainable innovation, which continuously reduces waste, and expands the capabilities of these systems is so hard to achieve? Can we truly achieve smarter systems and modern service? A number of organizations are asking these questions – and before looking at how these questions are being formalized into grand challenge questions for society – let’s look at what an IBM report concluded after surveying about 400 economists…. ==================== Quality of life for the average citizen (voter) depends on the quality of service and quality of jobs in 13 basic systems….. Local progress (from the perspective of the average citizen or voter) can be defined for our purposes as (quality of service & jobs) + returns (the provider, which is really the investor perspective, the risk taker in provisioning the service) + security (the authority or government perspective on the cost of maintaining order, and dealing with rules and rule violations) + smarter (or the first derivative – does all this get better over time – parents often talk about wanting to help create a better world for their children - sustainable innovation, means reducing waste, being good stewards of the planet, and expanding our capabilities to do things better and respond to challenges and outlier events better)…. Without putting too fine a point on it, most of the really important grand challenges in business and society relate to improving quality of life. Quality of life is a function of both quality of service from systems and quality of opportunities (or jobs) in systems. We have identified 13 systems that fit into three major categories – systems that focus on basic things people need, systems that focus on people’s activities and development, and systems that focus on governing. IBM’s Institute for Business Value has identified a $4 trillion challenge that can be addressed by using a system of systems approach. Employment data… 2008 http://www.bls.gov/news.release/ecopro.t02.htm A. 3+0.4+0.5+8.9+1.4+2.0=16.2 B. C.13.1+1.8=14.9 Total 150,932 (100%) Transportation (Transportation and Warehousing 4,505 (3%)) Water & Waste (Utilities 560 (0.4%)) Food & Manufacturing (Mining 717 (0.5%), Manufacturing 13,431 (8.9%), Agriculture, Forestry, Fishing 2,098 (1.4%)) Energy & Electricity Information (Information 2,997 (2%)) Construction (Construction 7,215 (4.8%)) Retail & Hospitality (Wholesale Trade 5,964 (4.0%), Retail Trade 15,356 (10.2%), Leisure and hospitality 13,459 (8.9%)) Financial & Banking/Business & Consulting (Financial activities 8,146 (5.4%), Professional and business services 17,778 (11.8%), Other services 6,333 (4.2%)) Healthcare (Healthcare and social assistance 15,819 (10.5%) Education (Educational services 3,037 (2%), Self-employed and unpaid family 9,313 (6.2%), Secondary jobs self-employed and unpaid family 1,524 (1.0%)) City Gov State Gov (State and local government 19,735 (13.1%)) Federal Gov (Federal government 2,764 (1.8%))
  • Why 13 disciplines/professions? This paper provides the answer. The disciplines relate to core service science concepts. The professions relate to the basic investment decision/resource allocation needed to run-transform-innovate service systems.
  • Spohrer, J, P Piciocchi, and Bassano (2012) Three Frameworks for Service Research: Exploring Multilevel Governance in Nested, Networked Systems Service Science June 2012 4:147-160; doi:10.1287/serv.1120.0012
  • Before we talk about the future of technology…. We should remember rules matter a lot too…. How we design systems matters….. Both how we design the technology & the rules (or institutions we live in) matters a lot… It matters for four key measures of systems – innovativeness, equity, sustainability, and resiliency… Societal performance on these four measures depends on technology (infrastructure), rules (institutions), skills (individuals), and what we value interms of quality of life (information)… Why are these people smiling? Every year NFL (National Football League) teams select the best new college players who indicate they are eligible for the NFL Draft…. Stanford’s quarterback Andrew Luck is one the best from 2011 What’s interesting is the Indianapolis Colts, the team he will play for the next decade, is one of the worst Source: http://www.rgj.com/viewart/20120426/SPORTS/304260061/NFL-draft-Colts-take-Stanford-QB-Andrew-Luck-open-draft http://en.wikipedia.org/wiki/National_Football_League_Draft
  • In the Handbook of Service Science, and other publications, we have layed out the conceptual foundations of service science – the first approximation of terms we believe every service scientist should know… The world view is that of an ecology of service-system-entities. Ecology is the study of the populations of entities, and their interactions with each other and the environment Types of Service System Entities, Interactions, and Outcomes is what a service scientist studies. Service systems include: Person, Family/Household, Business, Citiy, Nation, University, Hospital, Call-Center, Data-Center, etc. – any legal entity that can own property and be sued We see that Resources (People, Technology, Information, Organizations) and Stakeholder (Customers, Providers, Authorities, Competitors) are part of the conceptual framework for service science.
  • Specialization Division of Labor – Wealth of Nation The Theory of Moral Sentiments , 1759, and An Inquiry into the Nature and Causes of the Wealth of Nations , 1776 Comparative Advantage - Principles of Political Economy and Taxation (1817) Chapter on Value and Riches Credits: http://en.wikipedia.org/wiki/Adam_Smith http://en.wikipedia.org/wiki/David_Ricardo
  • So maybe technology will help us have greater and greater resiliency…. However, paradoxically there is a hidden cost to all this technology… How much knowledge does it take for a country, state, or city to have good measures on innovativeness, equity, sustainability, and resiliency? Source: http://www.youtube.com/watch?v=mwIjcv7OWMo Cesar Hidalgo, see minutes 7-19 of a longer youtube video
  • This slides was created by IBM GMU External Relations For information or queries about this presentation please contact: Megan Rosier , Manager, GMU External Relations – [email_address] Karen Davis , Director, GMU External Relations – [email_address]
  • Cities are about 2% of the land area, with 50% of the popuoation and 75% of the energy consumption, and 80% of the carbon emissions, according to Carolo Ratti who heads MIT Senseable Cities at MIT Media Lab. Of course, while the buildings and transportation in cities are important – what is really important are the people…. Headline: TED talk: Carlo Ratti (MIT) Architecture that senses and resonds http://www.ted.com/talks/carlo_ratti_architecture_that_senses_and_responds.html
  • Transportation is essential for flows and buildings are essential for human development Headline: TEDx Boston, Ryan Chin Urban Mobility (July 28, 2009) http://tedxboston.org/speaker/chin
  • In the future, robots will build and recycle whole buildings in a matter of hours. Already at Dongting lake in the Hunan Province in China, the Broad group has used prefab architecture to construct a 30 story building in 15 days (360 hours). When robots are used for construction and recycling, it will be even faster and more cost efficient. The building was stronger, safer, and more energy efficient than previous Broad group hotels. We often think of resiliency as the ability to recover very quickly, after a natural disaster or other external shock to a system. In the future resiliency will be more about rebuilding and recycling quickly to take advantage of newer and better materials, and ways of doing things. The external shocks to the system will more often than not be new innovations, not natural disasters… Headline: 30 stories in 15 days (story on Jan 10 th 2012 – built on Dec 31 2011) http://www.huffingtonpost.com/2012/01/10/30-story-hotel-constructed-in-15-days_n_1197991.html
  • In the future, robots will drive most of the cars – faster, safer, and more economically than people can. Of course, the future is already here, it is just not well distributed. The state of Nevada was the first state to allow self-driving vehicles to legally drive on their roads, as of June 22, 2011. http://www.forbes.com/sites/alexknapp/2011/06/22/nevada-passes-law-authorizing-driverless-cars/ Headline: Robot Car Helps Blind Man Get a Taco March 29th, 2012 http://www.robotshop.com/blog/robot-car-helps-blind-man-get-a-taco-1564 Self-Driving Car Test – Steve Mahan
  • Imagine cars and other products, being part of local physical supply chains. Manufacturing as a local recycling and assembly service Headline: TEDx Boston, Ryan Chin Urban Mobility (July 28, 2009) http://tedxboston.org/speaker/chin
  • If you haven’t seen it look for high tech car factory video …
  • Service systems and knowledge access evolving Nested, networked holistic product-service systems that provide “Whole Service” to the people-inside Source: Whole Service http://www.service-science.info/archives/1056 Source: Third Stream http://www2.lse.ac.uk/economicHistory/Research/CCPN/pdf/russell_report_thirdStream.pdf
  • Because nations compete and cooperate, they can be studied as abstract entities (service systems) learning to apply knowledge to co-create value with other nations. Why service scientists are interested in universities…. They are in many ways the service system of most central importance to other service systems… Graph based on data from Source: http://www.arwu.org/ARWUAnalysis2009.jsp Analysis: Antonio Fischetto and Giovanna Lella (URome, Italy) students visiting IBM Almaden Dynamic graphy based on Swiss students work: http://www.upload-it.fr/files/1513639149/graph.html US is still “off the chart” – China projected to be “off the chart” in less than 10 years: US % of WW Top-Ranked Universities: 30,3 % US % of WW GDP: 23,3 % Correlating Nation’s (2004) % of WW GDP to % of WW Top-Ranked Universities US is literally “off the chart” – but including US make high correlation even higher: US % of WW Top-Ranked Universities: 33,865 % US % of WW GDP: 28,365 %
  • http://www.bls.gov/emp/ep_chart_001.htm http://theeconomiccollapseblog.com/archives/student-loan-debt-hell-21-statistics-that-will-make-you-think-twice-about-going-to-college Posted below are 21 statistics about college tuition, student loan debt and the quality of college education in the United States.... #1 Since 1978, the cost of college tuition in the United States has gone up by over 900 percent . #2 In 2010, the average college graduate had accumulated approximately $25,000 in student loan debt by graduation day. #3 Approximately two-thirds of all college students graduate with student loans . #4 Americans have accumulated well over $900 billion in student loan debt. That figure is higher than the total amount of credit card debt in the United States. #5 The typical U.S. college student spends less than 30 hours a week on academics. #6 According to very extensive research detailed in a new book entitled "Academically Adrift: Limited Learning on College Campuses", 45 percent of U.S. college students exhibit "no significant gains in learning" after two years in college. #7 Today, college students spend approximately 50% less time studying than U.S. college students did just a few decades ago. #8 35% of U.S. college students spend 5 hours or less studying per week. #9 50% of U.S. college students have never taken a class where they had to write more than 20 pages. #10 32% of U.S. college students have never taken a class where they had to read more than 40 pages in a week. #11 U.S. college students spend 24% of their time sleeping, 51% of their time socializing and 7% of their time studying. #12 Federal statistics reveal that only 36 percent of the full-time students who began college in 2001 received a bachelor's degree within four years. #13 Nearly half of all the graduate science students enrolled at colleges and universities in the United States are foreigners. #14 According to the Economic Policy Institute, the unemployment rate for college graduates younger than 25 years old was 9.3 percent in 2010. #15 One-third of all college graduates end up taking jobs that don't even require college degrees. #16 In the United States today, over 18,000 parking lot attendants have college degrees. #17 In the United States today, 317,000 waiters and waitresses have college degrees. #18 In the United States today, approximately 365,000 cashiers have college degrees. #19 In the United States today, 24.5 percent of all retail salespersons have a college degree. #20 Once they get out into the "real world", 70% of college graduates wish that they had spent more time preparing for the "real world" while they were still in school. #21 Approximately 14 percent of all students that graduate with student loan debt end up defaulting within 3 years of making their first student loan payment.
  • Technology is used by providers to perform more and more of the routine manual, cognitive, and transactional work Jobs Change: Individual Competencies & Institutional Roles
  • Ready for Life-Long-Learning Ready for Teamwork Ready to Help Build a Smarter Planet T-shaped people are ready for Teamwork – they are excellent communicators, with real world experience, and deep (or specialized) in at least one culture, one discipline and one systems area, but with good team work skills interacting with others who are deep in other cultures, disciplines and systems areas. Also, T-shaped professionals also make excellent entrepreneurs, able to innovate with others to create new technology, business, and societal innovations. T-shaped people are adaptive innovators, and well prepared for life-long learning in case they need to become deep in some new area… they are better prepared than I-shaped people, who lack the breadth. Therefore, IBM and other public and private organizations are looking to hire more of this new kind of skills and experience profile – one that is both broad and deep.. These organizations have been collaborating with universities around the world to establish a new area of study known as service science, management, engineering, and design (SSMED) – to prepare computer scientists, MBAs, industrial engineers, operations research, management of information systems, systems engineers, and students of many other discipline areas – to understand better how to work on multidisciplinary teams and attack the grand challenge problems associated with improving service systems…
  • There are many opportunities for educational institutions to specialize. Better tuned competence of individuals allows graduates to hit the ground running and better fill roles in business and societal institutions…. Better general education will allow more rapid learning of an arbitrary area of specialization, and create a more flexible labor force… All service systems transform something – perhaps the location, availability, and configuration of materials (flow of things), or perhaps people and what they do (people’s activities), or perhaps the rules of the game, constraints and consequences (governance). How to visualize service science? The systems-disciplines matrix… SSMED or service science, for short, provides a transdisciplinary framework for organizing student learning around 13 systems areas and 13 specialized academic discipline areas. We have already discussed the 13 systems areas, and the three groups (flows, human activity, and governing)… the discipline areas are organized into four areas that deal with stakeholders, resources, change, and value creation. If we have time, I have included some back-up slides that describes service science in the next level of detail. However, to understand the transdisciplinary framework, one just needs to appreciate that discipline areas such as marketing, operations, public policy, strategy, psychology, industrial engineering, computer science, organizational science, economics, statistics, and others can be applied to any of the 13 types of systems. Service science provides a transdisciplinary framework to organize problem sets and exercises that help students in any of these disciplines become better T-shaped professionals, and ready for teamwork on multidisciplinary teams working to improve any type of service system. As existing disciplines graduate more students who are T-shaped, and have exposure to service science, the world becomes better prepared to solve grand challenge problems and create smarter systems that deliver modern service. Especially, where students have had the opportunity to work as part of an urban innovation center that links their university with real-world problems in their urban environment – they will have important experiences to help them contribute to solving grand challenge problems. ================================================ SSMED (Service Science, Management, Engineering and Design) Systems change over their life cycle… what is inside become outside and vice versa In the course of the lifecycle… systems are merged and divested (fusion and fission) systems are insourced and outsourced (leased/contracted relations) systems are input and output (owner ship relations) SSMED standard should ensure people know 13 systems and 13 disciplines/professions (the key is knowing them all to the right level to be able to communicate and problem-solve effectively) Multidisciplinary teams – solve problems that require discipline knowledge Interdisciplinary teams – solve harder problems, because they create new knowledge in between disciplines Transdisciplinary teams – solve very hard problems, because the people know discipline and system knowledge Ross Dawson says “Collaboration drives everything” in his talk about the future of universities… https://deimos.apple.com/WebObjects/Core.woa/BrowsePrivately/griffith.edu.au.3684852440
  • This slides was created by IBM GMU External Relations For information or queries about this presentation please contact: Megan Rosier , Manager, GMU External Relations – [email_address] Karen Davis , Director, GMU External Relations – [email_address]
  • Our world can be thought of as a nested system of systems…. Sources http://en.wikipedia.org/wiki/Matryoshka_doll http://blog.teacollection.com/history-of-nesting-dolls http://en.wikipedia.org/wiki/Japanese_traditional_dolls “ Japanese wooden dolls were made to look like the Seven Lucky Gods from Japanese mythology.  The outer most doll was Fukurokuju the Japanese god of happiness and longevity.  He had an abnormally long forehead “
  • For example, we are all part of at least ten regional systems levels from our household to the world… Which level is most important for resiliency? Arguably the city… the level of population is enough to support “the knowledge burden of advanced technology” required for a high-quality of life
  • However, it is also arguable that universities are important for resiliency… Source: http://www.nyu.edu/about/leadership-university-administration/office-of-the-president/redirect/speeches-statements/global-network-university-reflection.html
  • To begin, let’s consider the big picture – starting with the big bang…. and evolution of the earth, life on earth, human life, cities, universities, and the modern world… the evolution of observed hierarchical-complexity Age of natural systems (age of the universe): Big Bang http://en.wikipedia.org/wiki/Age_of_the_universe Age of urban systems (age of complex human-made world): Oldest city http://en.wikipedia.org/wiki/List_of_cities_by_time_of_continuous_habitation (end of last Ice Age was about 20,000 years ago, about 5 million people on earth by 10,000 years ago) http://www.ncdc.noaa.gov/paleo/ctl/100k.html (last Ice Age was probably started about 70,000 years ago when a super volcano erupted blocking sun light) Many people still ask -- where is the science in the “Service Science?” One answer is that the science is hidden away in each of the component disciplines that study service systems, scientifically from their particular perspective… However, the big picture answer is “Ecology” - Ecology is the study of the abundance and distribution of entities (populations of things) in an environment… and how the entities interact with each other and their environment over successive generations of entities. The natural sciences (increasingly interdisciplinary) study the left side, using physics, chemistry, and biology Service science (originated as interdisciplinary) studies the right side, using history, economics, management, engineering, design, etc. Service science is still a young area, but from the growth of service in nations and businesses to the opportunity to apply service science to build a smarter planet, innovate service systems, and improve quality of life… it is an emerging science with bright future, and yes… it will continue to evolve : - ) Most people think of ecology in terms of living organisms, like plants and animals in a natural environment. However, the concept of ecology is more general and can be applied to entities as diverse as the populations of types of atoms in stars to the types of businesses in a national economy. I want to start my talk today on “service,” by first thinking broadly about ecologies of entities and their interactions. Eventually, we will get to human-made service system entities and human-made value-cocreation mechanisms… but for today, let’s really start at the very beginning – the big bang. About 14B years ago (indicated by the top of this purple bar), our universe started with a big bang. And through a process of known as fusion, stars turned populations of lighter atoms like hydrogen into heavier atoms like helium, and when stars of a certain size have done all the fusion they could, they would start slowing down, and eventually collapse rapidly, go nova, explode and send heavier atoms out into the universe, and eventually new stars form, and the process repeats over and over, creating stars with different populations of types of atoms, including heavier and heavier elments. So where did our sun and the earth come from…. Eventually after about ten billion years in the ecology of stars and atoms within stars, a very important star formed our sun (the yellow on the left) – and there were plenty of iron and nickel atoms swirling about as our sun formed, and began to burn 4.5B years ago, and the Earth formed about 4.3B years ago (the blue on the left)… In less than a billion years, the early earth evolved a remarkable ecology of complex molecules, including amino acids, and after less than a billion years, an ecology of bacteria took hold on early earth (the bright green on the left). The ecology of single cell bacteria flourished and after another billion years of interactions between the bacteria, the first multicellular organisms formed, and soon the ecology of sponges (the light blue on the left) and other multi-cellular entities began to spread out across the earth. Then after nearly two billion years, a type of division of labor between the cells in multicelluar organism lead to entities with cells acting as neurons in the first clams (the red on the left), and these neurons allowed the clams to open and close at the right time. After only 200 million years, tribolites appeared the first organisms with dense neural structures that could be called brains appeared (the black on the left), and then after about 300 million years, multicelluar organisms as complex as bees appeared (the olive on the left), and these were social insects, with division of labor among individuals in a population, with queens, drones, worker bees. So 200 million years ago, over 13B years after the big bang, the ecology of living entities is well established on planet earth, including social entities with brains and division of labor between individuals in a population…. Living in colonies that some have compared to human cities – where thousands of individuals live in close proximity and divide up the work that needs to be done to help the colony survive through many, many generations of individuals that come and go. Bees are still hear today. And their wingless cousins, called ants, have taken division of labor to incredible levels of complexity in ant cities in nearly every ecological niche on the planet, except under water. Now let’s look at the human ecology,and the formation of service system entities and value-cocreation mechanisms, a small portion of which is represented by the colored bar on the right. Recall bees appeared about 200 million years ago, a small but noticeable fraction of the age of the universe. Now take 1% of this little olive slice, which is 2 million years… that is how long people have been on earth, just one percent of this little olive slice here. What did people do in most of that 2million years? Basically, they spread out to every corner of the planet, and changed their skin color, eye colors, and hair colors, they spread out and became diverse with many different appearances and languages. It took most of that 200 millions just to spread out and cover most of the planet with people. When there was no more room to spread out the density of people in regions went up…. Now take 1% of that 2million years of human history which basically involved spreading out to every corner of the planet and becoming more diverse, recall ecology is the study of abundance and distribution and types of interactions, and 1% of that 2million years is just 20,000 years, and now divide that in half and that represents 10,000 years. The bar on the right represents 10,000 years or just 500 generations of people, if a generation is about 20 years. 500 generations ago humans built the first cities, prior to this there were no cities so the roughly 5M people spread out around the world 0% lived in cities, but about 500 generations ago the first cities formed, and division of labor and human-made service interactions based on division of labor took off – this is our human big bang – the explosion of division of labor in cities. Cities were the big bang for service scientists, because that is when the diversity of specialized roles and division of labor, which is at the heart of a knowledge-based service economy really begins to take off... So cities are the first really important type of human-made service system entities for service scientists to study, the people living in the city, the urban dwellers or citizens are both customers of and providers of service to each other, and division of labor is the first really important type of human-made value-cocreation mechanism for service scientists to study. (Note families are a very important type of service system entity, arguably more important than cities and certainly much older – however, family structure is more an evolution of primate family structure – and so in a sense is less of a human-made service system entity and more of an inherited service system entity… however, in the early cities often the trades were handed down father to son, and mother to daughter as early service businesses were often family run enterprises in which the children participated – so families specialized and the family names often reflect those specialization – for example, much later in England we get the family names like smith, mason, taylor, cooper, etc.) So to a service scientist, we are very excited about cities as important types of service system entities, and division of labor as an important type of value-cocreation mechanism, and all this really takes off in a big way just 500 generations ago when the world population was just getting to around 5M people spread out all around the world – so 10,000 years about about 1% of the worlds population was living in early versions of cities. It wasn’t until 1900 that 10% of the world’s then nearly 2B people lived in cities, and just this last decade that 50% of the worlds 6B people lived in cities, and by 2050 75% of the worlds projected 10B population will be urban dwellers. If there is a human-made service system that we need to design right, it is cities. It should be noted that the growth of what economist call the service sector, parallels almost exactly the growth of urban population size and increased division-of-labor opportunities that cities enable – so in a very real sense SERVICE GROWTH IS CITY GROWTH OR URBAN POPULATION GROWTH… in the last decade service jobs passed agriculture jobs for the first time, and urban dwellers passed rural dwellers for the first time. But I am starting to get ahead of myself, let’s look at how the human-made ecology of service system entities and value-cocreation mechanisms evolved over the last 10,000 years or 500 generations. The population of artifacts with written language on them takes off about 6000 years ago or about 300 generations ago (the yellow bar on the right). Expertise with symbols helped certain professions form – and the first computers were people writing and processing symbols - scribes were required, another division of labor – so the service of reading and writing, which had a limited market at first began to emerge to help keep better records. Scribes were in many ways the first computers, writing and reading back symbols – and could remember more and more accurately than anyone else. Written laws (blue on right) that govern human behavior in cities takes off about 5000 years ago – including laws about property rights, and punishment for crimes. Shortly there after, coins become quite common as the first type of standard monetary and weight measurement system (green on right). So legal and economic infrastructure for future service system entities come along about 5000 years ago, or 250 generations ago, with perhaps 2% of the population living in cities…. (historical footnote: Paper money notes don’t come along much until around about 1400 years ago – bank notes, so use of coins is significantly older than paper money, and paper money really required banks as service system entities before paper money could succeed.). About 50 generations ago, we get the emergence of another one of the great types of service system entities – namely universities (light blue line) – students are the customers, as well as the employers that need the students. Universities help feed the division of labor in cities that needed specialized skills, including the research discipline skills needed to deepen bodies of knowledge in particular discipline areas. The red line indicates the population of printing presses taking off in the world, and hence the number of books and newspapers. This was only about 500 years or 25 generations ago. Now university faculty and students could more easily get books, and cities began to expand as the world’s population grew, and more cities had universities as well. The black line indicates the beginning of the industrial revolution about 200 years ago, the sream engine, railroads, telegraph and proliferation of the next great type of service system entity – the manufacturing businesses - that benefited from standard parts, technological advances and scale economies, and required professional managers and engineers. About 100 years ago, universities began adding business schools to keep up with the demand for specialized business management skills, and many new engineering disciplines including civil engineering, mechanical engineering, chemical engineering, and electrical engineering, fuel specialization and division of labor. By 1900, just over 100 years ago, or 5 generations ago 10% of the worlds population, or about 200 million people were living in cities and many of those cities had universities or were starting universities. Again fueling specialization, division of labor, and the growth of service as a component of the economy measured by traditional economists. Finally, just 60 years ago or 3 generations ago, the electronic semiconductor transistor was developed (indicated by the olive colored line on the right), and the information age took off, and many information intensive service activities could now benefit from computers to improve technology (e.g., accounting) and many other areas. So to recap, cities are one of the oldest and most important type of service system and universities are an important and old type of service system, as well as many types of businesses. Service science is the study of service system entities, their abundance and distribution, and their interactions. Division of labor is one of the most important types of value cocreation mechanisms, and people often need specialized skills to fill roles in service systems. Service science like ecology studies entities and their interactions over successive generations. New types of human-made service system entities and value-cocreation mechanisms continue to form, like wikipedia and peer production systems. Age of Unvierse (Wikipedia) The age of the universe is the time elapsed between the Big Bang and the present day. Current theory and observations suggest that the universe is 13.75 ±0.17 billion years old. [1] Age of Sun The Sun was formed about 4.57 billion years ago when a hydrogen molecular cloud collapsed. [85] Solar formation is dated in two ways: the Sun's current main sequence age, determined using computer models of stellar evolution and nucleocosmochronology , is thought to be about 4.57 billion years. [86] This is in close accord with the radiometric date of the oldest Solar System material, at 4.567 billion years ago. [87] [88] Age of Earth The age of the Earth is around 4.54 billion years (4.54 × 109 years ± 1%). [1] [2] [3] This age has been determined by radiometric age dating of meteorite material and is consistent with the ages of the oldest-known terrestrial and lunar samples . The Sun , in comparison, is about 4.57 billion years old , about 30 million years older. Age of Bacteria (Uni-cellular life) The ancestors of modern bacteria were single-celled microorganisms that were the first forms of life to develop on earth, about 4 billion years ago. For about 3 billion years, all organisms were microscopic, and bacteria and archaea were the dominant forms of life. [22] [23] Although bacterial fossils exist, such as stromatolites , their lack of distinctive morphology prevents them from being used to examine the history of bacterial evolution, or to date the time of origin of a particular bacterial species. However, gene sequences can be used to reconstruct the bacterial phylogeny , and these studies indicate that bacteria diverged first from the archaeal/eukaryotic lineage. [24] The most recent common ancestor of bacteria and archaea was probably a hyperthermophile that lived about 2.5 billion–3.2 billion years ago. [25] [26] Cities (Wikipedia) Early cities developed in a number of regions of the ancient world. Mesopotamia can claim the earliest cities, particularly Eridu, Uruk, and Ur. After Mesopotamia, this culture arose in Syria and Anatolia, as shown by the city of Çatalhöyük (7500-5700BC). Writing (Wikipedia) Writing is an extension of human language across time and space. Writing most likely began as a consequence of political expansion in ancient cultures, which needed reliable means for transmitting information, maintaining financial accounts, keeping historical records, and similar activities. Around the 4th millennium BC, the complexity of trade and administration outgrew the power of memory, and writing became a more dependable method of recording and presenting transactions in a permanent form [2] . In both Mesoamerica and Ancient Egypt writing may have evolved through calendrics and a political necessity for recording historical and environmental events. Written Law (Wikipedia) The history of law is closely connected to the development of civilization . Ancient Egyptian law, dating as far back as 3000 BC, contained a civil code that was probably broken into twelve books. It was based on the concept of Ma'at , characterised by tradition, rhetorical speech, social equality and impartiality. [81] [82] By the 22nd century BC, the ancient Sumerian ruler Ur- Nammu had formulated the first law code , which consisted of casuistic statements ("if ... then ..."). Around 1760 BC, King Hammurabi further developed Babylonian law , by codifying and inscribing it in stone. Hammurabi placed several copies of his law code throughout the kingdom of Babylon as stelae , for the entire public to see; this became known as the Codex Hammurabi . The most intact copy of these stelae was discovered in the 19th century by British Assyriologists, and has since been fully transliterated and translated into various languages, including English, German, and French. [83] Money (Wikipedia) Many cultures around the world eventually developed the use of commodity money . The shekel was originally both a unit of currency and a unit of weight. [10] . The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money – usually, the shell of the money cowry ( Cypraea moneta ) were used. According to Herodotus , and most modern scholars, the Lydians were the first people to introduce the use of gold and silver coin . [11] It is thought that these first stamped coins were minted around 650–600 BC. [12] Universities (Wikipedia) Prior to their formal establishment, many medieval universities were run for hundreds of years as Christian cathedral schools or monastic schools ( Scholae monasticae ), in which monks and nuns taught classes; evidence of these immediate forerunners of the later university at many places dates back to the 6th century AD. [7] The first universities were the University of Bologna (1088), the University of Paris (c. 1150, later associated with the Sorbonne ), the University of Oxford (1167), the University of Palencia (1208), the University of Cambridge (1209), the University of Salamanca (1218), the University of Montpellier (1220), the University of Padua (1222), the University of Naples Federico II (1224), the University of Toulouse (1229). [8] [9] Printing and Books (Wikipedia) Johannes Gutenberg's work on the printing press began in approximately 1436 when he partnered with Andreas Dritzehn—a man he had previously instructed in gem-cutting—and Andreas Heilmann, owner of a paper mill. [34] However, it was not until a 1439 lawsuit against Gutenberg that an official record exists; witnesses' testimony discussed Gutenberg's types, an inventory of metals (including lead), and his type molds. [34]
  • http://www.scribd.com/doc/46259459/Co-Evolution
  • Permission to re-distribute granted by Jim Spohrer – please request via email (spohrer@us.ibm.com) This talk provided a concise introduction to SSME+D evolving, and applying Service Science to build a Smarter Planet… Reference content from this presentation as: Spohrer, JC (2010) Presentation: SSME+D (for Design) Evolving: Update on Service Science Progress & Directions. Event. Place. Date. Permission to redistribute granted upon request to spohrer@us.ibm.com But I want to end by sharing some relevant quotes… The first you may have seen on TV or heard on the radio – it is from IBM – Instrumented, Interconnected, Intellient – Let’s build a smarter planet (more on this one shortly) Second, If we are going to build a smarter planet, let’s start by building smarter cities, (as we will see cities turn out to be ideal building blocks to get right for a number of reasons) And if we focus on cities, then the quote from the Foundation Metropolitan paints the right picture, cities learning from cities learning from cities… The next is probably the best known quote in the group “think global, act local” (we will revisit this important thought) Since all the major cities of the world have one or more universities, the next quote is of interest “the future is born in universities” And two more well known quotes about the future – the best way to predict the future is to build it, and the future is already here… it is just not evenly distributed. The next quote is an important one for discipline specialists at universities to keep in mind – real-world problems may not respect discipline boundaries (so be on guard for myopic solutions that appear too good to be true, they often are!)… Because if we are not careful, today’s problems may come from yesterday’s solutions… And since we cannot anticipate all risks or quickly resolve them once we notice them, we should probably never forget what HG Wells said - that history is a race between education and catastrophe… In a world of accelerating change, this last statement also serves as a reminder that the pace of real innovation in education is a good target for study in terms of smarter systems and modern service…
  • Sources http://en.wikipedia.org/wiki/IBM#cite_note-10K-0 http://www-03.ibm.com/press/us/en/pressrelease/33341.wss http://www.fiercecio.com/press-releases/ibm-reports-2010-fourth-quarter-and-full-year-results-nyse-ibm-q4
  • Service system entities learn to systematically exploit info & tech Learning Systems – Choice and Change Do = operate in comfort zone, applying existing knowledge Copy = to be the best, learn from the rest Invent = double monetize from internal use and external sales Add Rickets “Reaching the Goal” for Internal-External-Interaction Constraints. Explain Incremental-Radical-Super-Radical in terms of units (scientific measurement) For more on Exploitation-Exploration see below.. http://sonic.northwestern.edu/wp-content/uploads/2011/03/Keynote-Watts_Collective_Problems.pdf Lavie D & L Rosenkopf (2006) BALANCING EXPLORATION AND EXPLOITATION IN ALLIANCE FORMATION, The Academy of Management Journal, 49(4). 797-818. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.123.8271&rep=rep1&type=pdf “ Pressures for exploration. Whereas inertia drives firms’ tendencies to exploit, absorptive capacity facilitates counter pressures by furnishing the mechanism via which firms can identify the need for and direction of exploratory activities. Exploration is guided not only by inventing but also by learning from others (Huber, 1991; Levitt & March, 1988) and by employing external knowledge (March & Simon, 1958). Absorptive capacity, defined as the ability to value, assimilate, and apply external knowledge (Cohen & Levinthal, 1990), helps firms identify emerging opportunities and evaluate their prospects, thus enhancing exploration. It adjusts firms’ aspiration levels, so that they become attuned to learning opportunities and more proactive in exploring them. Indeed, prior research has demonstrated how absorptive capacity enhance organizational responsiveness and directs scientific and entrepreneurial discovery (Deeds, 2001; Rosenkopf & Nerkar, 2001). It also increases the likelihood of identifying external opportunities and can therefore lead to exploration in one or more domains of alliance formation.” For more on Run-Transform-Innovate see below… When I asked how he measures the performance and effectiveness of IBM's IT team, Hennessy pointed to its "run-to-transform" ratio. IBM's IT department is divided into three groups: a "run" organization that's responsible for keeping systems running smoothly; a "transform" team focused on business-process simplification and other business transformation; and an "innovate" unit that pursues leading-edge technology initiatives. Hennessy reports to Linda Sanford, IBM's senior VP of on-demand transformation and IT. Practicing what it preaches, IBM doesn't think of its IT organization as being merely an IT department. "We call it BT and IT," Hennessy says, giving business transformation equal billing to the software, systems, and services side of its mission. http://www.informationweek.com/blog/main/archives/2009/04/ibm_cio_turns_d.html IBM CIO's Strategy: Run, Transform, Innovate Posted by John Foley on Apr 30, 2009 11:05 AM Like other CIOs, IBM's Mark Hennessy knows that a dollar saved on data center operations is a dollar earned for business-technology innovation. IBM has moved the dial on its IT budget 10 percentage points toward innovation in recent years, and Hennessy says there are still more operational efficiencies to be gained.I sat down with Hennessy for more than an hour recently in New York to talk about how he has adapted to being a CIO. A 25-year IBM veteran, he took over as CIO about 18 months ago, having spent most of his career on the business side, in sales, marketing, finance, and, most recently, as general manager of IBM's distribution sector, which works with clients in the retail, travel, transportation, and consumer products industries. Hennessy's IT team supports the company's strategy in three broad ways: by running and optimizing IBM's internal IT operations, by working with IBM business units in support of their objectives, and by facilitating company-wide collaboration, innovation, and technology requirements across 170 countries. In times past, IBM had as many as 128 different CIOs across its businesses. These days--in support of CEO Sam Palmisano's strategy of establishing a global, integrated enterprise--it has only one, and Hennessy is it. When I asked how he measures the performance and effectiveness of IBM's IT team, Hennessy pointed to its "run-to-transform" ratio. IBM's IT department is divided into three groups: a "run" organization that's responsible for keeping systems running smoothly; a "transform" team focused on business-process simplification and other business transformation; and an "innovate" unit that pursues leading-edge technology initiatives. A few years ago, IBM was spending 73% of its IT budget on keeping systems and services running and 27% on innovation. This year, its run-to-transform ratio will hit 63%-37%. Roughly speaking, IBM is shifting an additional 2% of its IT budget from run to innovation each year, and Hennessy has every expectation that his group will continue moving the ratio in that direction. "I don't see an end in sight," he says. In fact, Hennessy says that IBM's run-to-innovation ratio has improved more this year than last. "So it's actually accelerating for us," he says. Where do the efficiencies come from? The same place other CIOs find them. Server virtualization, data center consolidation (IBM has consolidated 155 data centers down to five), energy savings, applications simplification (from 15,000 apps to 4,500 apps), end user productivity, organizational collaboration, shifting skills globally, and business-process simplification. IBM has internal IT projects underway now in the areas of its supply chain, finance, workforce management, and order-to-cash processes. Hennessy reports to Linda Sanford, IBM's senior VP of on-demand transformation and IT. Practicing what it preaches, IBM doesn't think of its IT organization as being merely an IT department. "We call it BT and IT," Hennessy says, giving business transformation equal billing to the software, systems, and services side of its mission.
  • In the Handbook of Service Science, and other publications, we have layed out the conceptual foundations of service science – the first approximation of terms we believe every service scientist should know… The world view is that of an ecology of service-system-entities. Ecology is the study of the populations of entities, and their interactions with each other and the environment Types of Service System Entities, Interactions, and Outcomes is what a service scientist studies. Service systems include: Person, Family/Household, Business, Citiy, Nation, University, Hospital, Call-Center, Data-Center, etc. – any legal entity that can own property and be sued We see that Resources (People, Technology, Information, Organizations) and Stakeholder (Customers, Providers, Authorities, Competitors) are part of the conceptual framework for service science.
  • Service systems are the fundamental abstraction of service science. The ABC’s of service-systems thinking are: A is the Service Provider, B is the Service Customer, and C is the Service Target For example, in College as a Service (CaaS), A might be a college, B an undergraduate student, and C dimensions of the student that will be transformed, such as specific skills and competences, certifications, and post-family social relationships, including help finding a good job
  • In publications, we have also talked about foundational premises of service science, such as service system entities configure four type of resourves… Four key types of resources: People – example, a doctor or a nurse Technology – example, a computer or car, but can also be the environment, such as an agricultural-field or a coal-mine Organizations – example, IBM or a university like MIT or a government like the national government of Germany Shared Information – example, could be language, laws, measures, etc. Physicists resolve disputes about what is physical and non-physical Judges resolve disputes about rights, within their jurisdictions
  • Service system entities calculate value from multiple stakeholder perspectives Four Key Stakeholder Perspectives: P = Provider C = Customer A = Authority S = Substitute (Competitor)
  • Service system entities reconfigure access rights to resources by mutually agreed to value propositions Four key types of access rights: Owned Outright – buying a car or a house Leased/Contract – renting a car or hotel room Shared Access – most roads, the air, and common-pool-resources Privileged Access – your thoughts, governors access to the governor’s mansion, marriage, childbirth (follows from nature or roles)
  • Service system entities interact to create ten types of outcomes, which elaborates game theories four outcomes of a two player game, to reflect that even two players games take place in the context of four primary stakeholders – the customer, the provider, the authority, and the competitors. Normative – service systems judge each other and have expectations about expected and desired behaviors… (sometimes formalized as laws) The purpose of Service Systems is Value-Cocreation (North’s economic institutions, Barnard’s cooperative systems, Trist’s sociotechnical systems, Engelbart’s augmentation systems, Normann’s value creation systems, Malone’s coordination science, Flores, Williamson TCE/NIE/Contracting, etc.) Provider and client interact to co-create value Value is achieving desired change or the prevention/undoing of unwanted change Changes can be physical, mental, or social Value is in the eye of the beholder, and may include complex subjective intangibles, bartered – knowledge intensive trust matters transaction costs matter Boundary of service experience in space and time may be complex Service is value coproduction, or finding win-win interactions between a provide and a customer. If service is value coproduction, what is a service system? The simplest service system is a person (consumes and produces services), a business enterprise is also a service system (consumes and produces services), and a nation can be viewed as a service system (produces and consumes services). ------------------ Depending on time scale and outcome, both war and investment can be a lose-lose encounter.
  • Service system entities learn to systematically exploit info & tech Add Rickets “Reaching the Goal” for Internal-External-Interaction Constraints. Explain Incremental-Radical-Super-Radical in terms of units (scientific measurement) For more on Exploitation-Exploration see below.. http://sonic.northwestern.edu/wp-content/uploads/2011/03/Keynote-Watts_Collective_Problems.pdf Lavie D & L Rosenkopf (2006) BALANCING EXPLORATION AND EXPLOITATION IN ALLIANCE FORMATION, The Academy of Management Journal, 49(4). 797-818. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.123.8271&rep=rep1&type=pdf “ Pressures for exploration. Whereas inertia drives firms’ tendencies to exploit, absorptive capacity facilitates counter pressures by furnishing the mechanism via which firms can identify the need for and direction of exploratory activities. Exploration is guided not only by inventing but also by learning from others (Huber, 1991; Levitt & March, 1988) and by employing external knowledge (March & Simon, 1958). Absorptive capacity, defined as the ability to value, assimilate, and apply external knowledge (Cohen & Levinthal, 1990), helps firms identify emerging opportunities and evaluate their prospects, thus enhancing exploration. It adjusts firms’ aspiration levels, so that they become attuned to learning opportunities and more proactive in exploring them. Indeed, prior research has demonstrated how absorptive capacity enhance organizational responsiveness and directs scientific and entrepreneurial discovery (Deeds, 2001; Rosenkopf & Nerkar, 2001). It also increases the likelihood of identifying external opportunities and can therefore lead to exploration in one or more domains of alliance formation.” For more on Run-Transform-Innovate see below… When I asked how he measures the performance and effectiveness of IBM's IT team, Hennessy pointed to its "run-to-transform" ratio. IBM's IT department is divided into three groups: a "run" organization that's responsible for keeping systems running smoothly; a "transform" team focused on business-process simplification and other business transformation; and an "innovate" unit that pursues leading-edge technology initiatives. Hennessy reports to Linda Sanford, IBM's senior VP of on-demand transformation and IT. Practicing what it preaches, IBM doesn't think of its IT organization as being merely an IT department. "We call it BT and IT," Hennessy says, giving business transformation equal billing to the software, systems, and services side of its mission. http://www.informationweek.com/blog/main/archives/2009/04/ibm_cio_turns_d.html IBM CIO's Strategy: Run, Transform, Innovate Posted by John Foley on Apr 30, 2009 11:05 AM Like other CIOs, IBM's Mark Hennessy knows that a dollar saved on data center operations is a dollar earned for business-technology innovation. IBM has moved the dial on its IT budget 10 percentage points toward innovation in recent years, and Hennessy says there are still more operational efficiencies to be gained.I sat down with Hennessy for more than an hour recently in New York to talk about how he has adapted to being a CIO. A 25-year IBM veteran, he took over as CIO about 18 months ago, having spent most of his career on the business side, in sales, marketing, finance, and, most recently, as general manager of IBM's distribution sector, which works with clients in the retail, travel, transportation, and consumer products industries. Hennessy's IT team supports the company's strategy in three broad ways: by running and optimizing IBM's internal IT operations, by working with IBM business units in support of their objectives, and by facilitating company-wide collaboration, innovation, and technology requirements across 170 countries. In times past, IBM had as many as 128 different CIOs across its businesses. These days--in support of CEO Sam Palmisano's strategy of establishing a global, integrated enterprise--it has only one, and Hennessy is it. When I asked how he measures the performance and effectiveness of IBM's IT team, Hennessy pointed to its "run-to-transform" ratio. IBM's IT department is divided into three groups: a "run" organization that's responsible for keeping systems running smoothly; a "transform" team focused on business-process simplification and other business transformation; and an "innovate" unit that pursues leading-edge technology initiatives. A few years ago, IBM was spending 73% of its IT budget on keeping systems and services running and 27% on innovation. This year, its run-to-transform ratio will hit 63%-37%. Roughly speaking, IBM is shifting an additional 2% of its IT budget from run to innovation each year, and Hennessy has every expectation that his group will continue moving the ratio in that direction. "I don't see an end in sight," he says. In fact, Hennessy says that IBM's run-to-innovation ratio has improved more this year than last. "So it's actually accelerating for us," he says. Where do the efficiencies come from? The same place other CIOs find them. Server virtualization, data center consolidation (IBM has consolidated 155 data centers down to five), energy savings, applications simplification (from 15,000 apps to 4,500 apps), end user productivity, organizational collaboration, shifting skills globally, and business-process simplification. IBM has internal IT projects underway now in the areas of its supply chain, finance, workforce management, and order-to-cash processes. Hennessy reports to Linda Sanford, IBM's senior VP of on-demand transformation and IT. Practicing what it preaches, IBM doesn't think of its IT organization as being merely an IT department. "We call it BT and IT," Hennessy says, giving business transformation equal billing to the software, systems, and services side of its mission.
  • Also, recently in the Handbook of Service Science, in Spohrer and Maglio we describe the importance of symbol processing in service systems for the calculation and innovation of value cocreation opportunities… Newell, A (1980) Physical symbol systems, Cognitive Science , 4, 135-183. Newell, A & HA Simon(1976). Computer science as empirical inquiry: symbols and search. Communications of the ACM, 19, 113-126.
  • We can summarize these as the six foundational premises of service science, and empirical evidence for and against them can be marshaled… and studies are appearing that do just that…
  • There are many books to help teach aspects of service science, service system thinking, and stakeholder analysis Service Science Reading List – Many textbooks and reference-textbooks included: http://www.cob.sjsu.edu/ssme/refmenu.asp
  • Korsten, P. and Seider, C. (2010) The world’s US$4 trillion challenge: Using a system-of-systems approach to build a smarter planet. IBM Institute for Business Value. http://www-935.ibm.com/services/us/gbs/bus/html/ibv-smarter-planet-system-of-systems.html The IBM report concluded that our planet can be viewed as a complex, dynamic, highly interconnected $54 trillion system of systems…. Some of you recognize that $54 trillion number is 100% if the WW 2008 GDP, and because GDP does not capture all the value (both gray and black market, as well as many types of value created by families and communities that is not part of formal economic exchange) the real value is much higher – but still $54 trillion per year is a very large number. The US economy is about 20-25% of the total. Also the top 2000 publically traded companies in the world, have annual revenues that are nearly 50% of this amount. So while it is a large number, it is possible to estimate the contribution made by individual nations and individual large businesses – and most importantly it is possible to see how complex and interconnected these systems are. But what about the waste or inefficiencies in these systems…
  • Korsten, P. and Seider, C. (2010) The world’s US$4 trillion challenge: Using a system-of-systems approach to build a smarter planet. IBM Institute for Business Value. http://www-935.ibm.com/services/us/gbs/bus/html/ibv-smarter-planet-system-of-systems.html The 480 economists surveyed estimate that all the systems carry inefficientes of up to $15 trillion, of which $4 trillion could be eliminated… The title of this IBM Business Value report is in fact “The World’s $4 Trillion Challenge: Using a system of systems approach to build a smarter planet.” One implication of this report since cities are where most of the population of the world is concentrated, is that some number of cities have over $1B in annual waste and inefficiencies that can be eliminated. This report is required reading for everyone in cities and universities around the world, who are interested in partnering together to first (1) estimate and develop ways of measuring the inefficiencies, and then (2) create actions plans that can compete for funding and other resources to make needed changes. As the systems reduce waste and expand capabilities for measuring inefficiencies, the systems become smarter systems and quality of life is improved thru modern service… And the good news is that every day there are more and more success stories being created. For example, the 2009 IBM Annual Report contains a map of the world….
  • What would it take to have a Moore’s Law for buildings? Or university campuses? Or city infrastructure? In conclusion, a focus on smarter systems and modern service can help cities and universities (along with other industry and government partners) to invest together in sustainable innovations, that both reduces waste and expands capabilities. Perhaps someday we may even discover and equivalent of Moore’s Law for improving service systems… but until that time, I want to say… ================================ Moore’s Law is sustained by investments that improve computational systems according to a roadmap Can we create an investment roadmap that will improve service systems according to a roadmap? GIE (Globally Integrated Enterprise) uses a run-transform-innovate investment model for continuous improvement. Run = use existing knowledge, routine operations and maintenance Transform = use industry best practice knowledge to gain the benefits of known improvements Innovation = create new knowledge that allows improvements in both ends and means of service systems, and the resources they configure. As information about service systems doubles each year, and storage, processing, and bandwidth rise, making globally better decisions is an important opportunity to explore. FYI.... short history of transistors, integrated circuits, and data centers From transistors... 1. The transistor is considered by many to be the greatest technology invention of the 20th Century 2. While the concept of the transistor has been around since the 1920's (Canadian Physicist Julius Edgar Lilienfeld's 1925 Patent - devices that use physical phenomenon of field electronic emissions)... 3. Commercially available individual transistors that could be wired into circuits, invented and commercialized in 1947 & 1948 (Bell Labs Shockley Point Contact/Junction Transistor Theory 1947, Raytheon CK703 first commercially available 1948) To Integrated circuits... 4. However, it was not until the late 1950's and early 1960's that manufacturing process advances and commercial applications began using many of them in integrated circuits (TI, Bell Labs, etc.) - Sept 1958 the first integrated circuit (Jack Kilby TI) To Moore's law.... 5. By 1965 Gordon Moore's (Intel) paper stated the number of transistors on a chip would double about every two years (and exponential increase that has over 40 years of confirmation)... 6. The number of transistors manufactured each year (in 2009) is estimated at 10**18 - 3.9 x 10**6 transistors produced in 1957 (tenth anniversary of first transistor) - abut 10**18 transistors manufactured in 2009 (62th anniversary of first transistor) To data centers and "electricity consumption" .... 7. By 2005, data centers and server farms consume 0.5% of total worldwide electricity production (1% if cooling is included) - 2005 consumption equivalent of seventeen 1000 MW powerplants - electric consumption for data centers doubled from 2000 to 2005 Sources: http://semiconductormuseum.com/HistoricTransistorTimeline_Index.htm http://www.mentor.com/company/industry_keynotes/upload/rhines-globalpress-low-power.pdf http://www.iop.org/EJ/article/1748-9326/3/3/034008/erl8_3_034008.pdf?request-id=7cf4b6e5-498f-4ed4-bfc9-76eda96773ce
  • Sources: http://en.wikipedia.org/wiki/Herbert_Simon http://www.kellogg.northwestern.edu/faculty/bio/jones_b.htm The Burden of Knowledge and the 'Death of the Renaissance Man': Is Innovation Getting Harder? Benjamin F. Jones NBER Working Paper No. 11360 Issued in May 2005 NBER Program(s):    PR This paper investigates, theoretically and empirically, a possibly fundamental aspect of technological progress. If knowledge accumulates as technology progresses, then successive generations of innovators may face an increasing educational burden. Innovators can compensate in their education by seeking narrower expertise, but narrowing expertise will reduce their individual capacities, with implications for the organization of innovative activity - a greater reliance on teamwork - and negative implications for growth. I develop a formal model of this "knowledge burden mechanism" and derive six testable predictions for innovators. Over time, educational attainment will rise while increased specialization and teamwork follow from a sufficiently rapid increase in the burden of knowledge. In cross-section, the model predicts that specialization and teamwork will be greater in deeper areas of knowledge while, surprisingly, educational attainment will not vary across fields. I test these six predictions using a micro-data set of individual inventors and find evidence consistent with each prediction. The model thus provides a parsimonious explanation for a range of empirical patterns of inventive activity. Upward trends in academic collaboration and lengthening doctorates, which have been noted in other research, can also be explained by the model, as can much-debated trends relating productivity growth and patent output to aggregate inventive effort. The knowledge burden mechanism suggests that the nature of innovation is changing, with negative implications for long-run economic growth.
  • No one person has the knowledge or capabilities without the help of others and accumulated technology to build something as simple as a pencil. So resiliency and quality-of-life will exhibit scale effects and knowledge burden fragility… Source: http://www.thomasthwaites.com/the-toaster-project/ http://www.youtube.com/watch?v=R5Gppi-O3a8 http://www.ted.com/talks/thomas_thwaites_how_i_built_a_toaster_from_scratch.html
  • Universities connect information flows between other HSS, cities, states, nations Local optimizations can spread quickly to other HSS… Top 3000 cities: http://www.mongabay.com/cities_pop_02.htm Of course the opportunity is not just local – while local innovation impact the lives of staff, faculty, students and their families most directly – as cities partner more (twin city and sister city programs) and as universities also establish global collaborations with campuses in other regions of the world – the opportunity for better city-university partnerships is both local and global.
  • Edu-Impact.Com: Growing Importance of Universities with Large, Growing Endowments Recently visited Yang building at Stanford One of the greenest buildings on the planet But if it does not evolve in 20 years it will not be the greenest building Visited supercomputers – we have two at IBM Almaden – there was a time they were in the top 100 supercomputers in the world – not any more …. So a Moore’s law of buildings is more than cutting waste in half every year, it is also about the amount of time it takes to structural replace the material with newer and more modern materials that provide benefits…
  • What are the largest and smallest service system entities that have the problem of interconnected systems? Holistic Service Systems like nations, states, cities, and universities – are all system of systems dealing with flows, development, and governance. =============\\ Nations (~100) States/Provinces (~1000) Cities/Regions (~10,000) Educational Institutions (~100,000) Healthcare Institutions (~100,000) Other Enterprises (~10,000,000) Largest 2000 >50% GDP WW Families/Households (~1B) Persons (~10B) Balance/Improve Quality of Life, generation after generation GDP/Capita Quality of Service Customer Experience Quality of Jobs Employee Experience Quality of Investment-Opportunities Owner Experience Entrepreneurial Experience Sustainability GDP/Energy-Unit % Fossil % Renewable GDP/Mass-Unit % New Inputs % Recycled Inputs
  • In today’s talk we will be thinking together about the future…. What is the future? We can imagine many possibilities… I show this for two reasons: - I believe computers will soon be helping policymakers and others explore future possibilities better - I want us to be thinking about resiliency of our systems in the future, and what are the weakest links in creating resilient cities and universities… what do we do if the computers go down, when we depend more and more on technology for a high quality of life? Source: http://www.kurzweilai.net/cartoon-what-is-the-meaning-of-life
  • There are many visions of the future – and many show innovations that improve quality of life… by improving the way we interact to co-create value with others… http://www.youtube.com/watch?v=6Cf7IL_eZ38 http://www.youtube.com/watch?v=jZkHpNnXLB0
  • I am working on what the transportation, communication, and energy costs are at each stage. 1. HG1: Human labor (transportation walking) 2. HG1: Human labor 3. Ag1: Human and animal labor (transportation riding) 4. Ag2: Human and animal labor 5. Manuf1: Water energy labor 6. Manuf1: Steam labor (railroad, telegraph) 7. Service1: Oil and natural gas energy labor (cars, telephone) 8. Service2: Electricity, and transistor mental labor (hybrid cars, air travel, internet) 9. Sustainable1: Solar energy labor (electric vehicles, telepresence, smart phones) 10. Sustainable2: Natural language processing mental labor (Watson) Consider criminals in each stage, so ten to consider… (type of competitor)
  • R&H/M&E/C&S = Retail & Hospitality/Media&Entertainment/Culture&Sports ICT = Information & Communication Technologies
  • Do we need PIS = Physical Information Systems, that have a memory for example, but maybe do not have symbolic processing capabilities? How is Facebook, LinkedIn, Twitter, Blogs, etc. part of the PSS for the SSE? How can the game be defined better so that Quality-of-Life and Value-Cocreation make more sense? How can an instance be created of a multigenerational example of the game? How can sustainale energy without the hot air play a role?

Hsse and smarter planet 201200722 v4 Presentation Transcript

  • 1. IBM University Programs worldwide, accelerating regional development (IBM Upward) The Human Side of Service Engineering & Smarter Planet IBM Centennial Icon of Progress Smarter Planet T-shaped PeopleDr. James (“Jim”) C. Spohrer, spohrer@us.ibm.comInnovation Champion and Director IBM UPward(University Programs worldwide, accelerating regional development)Association of Human Factors & Ergonomics & HSSE 2012San Jose State University, San Jose, CA, USA, Sunday July 22, 2012 © 2012 IBM Corporation
  • 2. Today’s Talk  HSSE Challenges – The “Big Four” in Crisis – How did we get here?  Seeing Service Systems More Clearly – Through the Lens of Quality-of-Life – What is Quality-of-Life?  Human Side of Service Engineering (HSSE) – Empowering People To See & Improve Service Systems – Some Scientific Foundations  Why Cities Are Important – Holistic Product-Service Systems – “Whole Service” & Quality-of-Life  Why Universities Are Important – Because They Are Mini-Cities!!! – Holistic Product-Service Systems  Thank-You’s2 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 3. Challenges: Human Side of Service Engineering (HSSE)  The “Big Four” in Crisis – Financial – Healthcare – Education – Government3 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 4. Evert Gummesson: Rise of ServiceHuman Activity Shifts: Sociotechnical System Evolution Relationship Networks Estimated world (pre-1800) and then U.S. Labor Percentages by Sector 120 100 Services (Info) 80 Services (Other) 60 Industry (Goods) Agriculture 40 Hunter-Gatherer 20 0 A A A A 50 00 50 00 00 50 Y Y Y Y 18 18 19 19 0 20 20 0 0 00 00 00 00 20 00 10 20 20 Estimations based on Porat, M. (1977) Info Economy: Definitions and Measurement The Company of The Pursuit of Strangers : A Natural Organizational History of Economic Intelligence, Life by James G. March by Paul Seabright Exploitation vs exploration4 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 5. Human Population: Sociotechnical System Evolution Information Technologies, etc. Scientific Method, Industrialization Colonial Expansion & Economics, Rise of the modern managerial firm & Politics, Education, Healthcare & Effects of Agriculture, Shadows in the Sun, The Visible Hand: The by Wade Davis Managerial Revolution in “Ethnosphere. sum total of all the thoughts, beliefs, myths, and American Business institutions brought into being by the by Alfred Dupont Chandler human imagination”5 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 6. Economic Shift in National Economies World’s Large Labor Forces US shift to service jobs A = Agriculture, G = Goods, S = Service 2010 2010 Nation Labor % WW A % G % S % 40yr Service Growth (A) Agriculture: Value from China 25.7 49 22 29 142% harvesting nature India 14.4 60 17 23 35% (G) Goods: U.S. 5.1 1 23 76 23% Value from making products Indonesia 3.5 45 16 39 34% (S) Service: Brazil 3.0 20 14 Daryl Pereira/Sunnyvale/IBM@IBMUS, 66 61% Value from IT augmented workers in smarter systems Russia 2.4 10 21 69 64% that create benefits for customers and sustainably improve quality of life. Japan 2.2 5 28 67 45% Nigeria 1.6 70 10 20 19% Bangladesh 2.1 63 11 26 37% Germany 1.4 3 33 64 42% NationMaster.com, International Labor Organization Note: Pakistan, Vietnam, and Mexico now larger LF than Germany6 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 7. Growth of Service Revenue at IBM 2010 Pretax Income Mix Revenue Growth by Segment SYSTEMS (AND FINANCING)SOFTWARE 17% Services 44% Software 39% Systems SERVICES IBM Annual ReportsWhat do IBM Service Professionals Do? Run IT & enterprise systems for customers,help Transform customer processes to best practices, and Innovate with customers.7 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 8. From Sociotechnical Systems to Smarter Service Systems INSTRUMENTED INTERCONNECTED INTELLIGENT We now have the ability People, systems and We can respond to changes to measure, sense and objects can communicate quickly and accurately, see the exact condition and interact with each and get better results of practically everything. other in entirely new by predicting and optimizing PRODUCTS ways. IT NETWORKS COMMUNICATIONS for future events.WORKFORCE SUPPLY CHAIN TRANSPORTATION BUILDINGS8 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 9. Priorities: Succeeding through Service Innovation - A Framework for Progress (http://www.ifm.eng.cam.ac.uk/ssme/) Source: Workshop and Global Survey of Service Research Leaders (IfM & IBM 2008) IBM University Programs worldwide, accelerating regional development (IBM Upward) 1. Emerging demand 2. Define the domain 3. Vision and gaps 4. Bridge the gaps 5. Call for actions Service Service Service Stakeholder The white paper offers a starting point to - Innovation Systems Science Priorities Growth in service Customer-provider To discover the Education GDP and jobs interactions that underlying enable value principles of Skills Develop programmes Service quality cocreation complex service & Mindset & qualifications & productivity systems Dynamic Research Environmental configurations of Systematically Encourage an Knowledge friendly & resources: people, create, scale and interdisciplinary & Tools approach sustainable technologies, improve systems organisations and Urbanisation & information Foundations laid Business aging population by existing Employment Increasing scale, disciplines Develop and improve & Collaboration Globalisation & complexity and service innovation technology drivers connectedness of Progress in Government roadmaps, leading to a service systems academic studies doubling of investment Opportunities for and practical tools Policies in service education businesses, B2B, B2C, C2C, & Investment and research by 2015 governments and B2G, G2C, G2G Gaps in knowledge individuals service networks and skills Glossary of definitions, history and outlook of service research, global trends, and ongoing debate © 2012 IBM Corporation
  • 10. Priorities: Research Framework for the Science of Service Pervasive Force: Leveraging Technology to Advance Service Strategy Development Execution Priorities Priorities Priorities Fostering Service Stimulating Effectively Branding Infusion and Growth Service Innovation and Selling Services Improving Well-Being Enhancing the Service Enhancing through Experience through Service Design Transformative Service Cocreation Optimizing Measuring and Creating and Maintaining Service Networks Optimizing the Value of a Service Culture and Value Chains Service Source: Global Survey of Service Research Leaders (Ostrom et al 2010)10 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 11. Why is it hard to see service systems clearly? Design/ Cognitive Science Systems Engineering “service science is “a service system is athe transdisciplinary study of human-made system to improve service systems & provider-customer interactions value-cocreation” and value-cocreation outcomes, by dynamically configuring resource Marketing access via value propositions, most often studied by many disciplines, one piece at a time.” The ABC’s: The provider (A) and a customer (B) transform a target (C) Computer Science/ Artificial Intelligence Economics & Law Operations 11 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 12. Our ambition is to reach K-12 students with Service Science & STEM:“The systems we live in, and the systems we are…”  Challenge-based Project to Design Improved Service Systems – K - Transportation & Supply Chain Systems – 1 - Water & Waste Recycling that focus on Flow of things – 2 - Food & Products (Nano) – 3 - Energy & Electric Grid – 4 – Information/ICT & Cloud (Info) Systems – 5 - Buildings & Construction that focus on – 6 – Retail & Hospitality/Media & Entertainment (tourism) and Human Activities Development – 7 – Banking & Finance/Business & Consulting – 8 – Healthcare & Family Life/Home (Bio) – 9 – Education /Campus & Work Life/Jobs & Entrepreneurship (Cogno) – 10 – City (Government) Systems that focus on – 11 – State/Region (Government) Governing – 12 – Nation (Government) – Higher Ed – T-shaped depth added, cross-disciplinary project teams – Professional Life – Adaptive T-shaped life-long-learning & projects “Imagine smarter systems, explain why better (service systems & STEM language)” STE(A)M = Science, Technology, Engineering, (Arts) and Mathematics See NAE K-12 engineering report: http://www.nap.edu/catalog.php?record_id=12635 See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning12 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 13. “Service is the application of competence [knowledge] for the benefit of another entity.”Seeing Our World And Us Vargo,SL & RF Lusch (2004). Evolving to a new dominant logic for marketing. Journal of Marketing, 68, 1 – 17. Ha rt sP Pa art H as Building Smarter Cities = Natural Systems Service Systems Apply Service Systems Planetary Systems Knowledge To Realize Benefits water, electricity, transportation, education, healthcare, etc. Be ts n ef i n ef i ts Be Carbon Capabilities, Footprint Experience (Choices) (Choices) Quality of Life13 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 14. California Human Development Report 2011:Measuring quality-of-life…. http://www.measureofamerica.org/docs/APortraitOfCA.pdf14 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 15. What improves Quality-of-Life? Service System Innovations * = US Labor % in 2009. A. Systems that focus on flow of things that humans need (~15%*) 20/10/10 1. Transportation & supply chain 2/7/4 2. Water & waste recycling/Climate & Environment2/1/1 7/6/1 3. Food & products manufacturing 1/1/0 4. Energy & electricity grid/Clean Tech 5/17/27 5. Information and Communication Technologies (ICT access) B. Systems that focus on human activity and development (~70%*) 1/0/2 6. Buildings & construction (smart spaces) (5%*) 24/24/1 7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*) 2/20/24 7/10/3 (wealthy) (21%*) 8. Banking & finance/Business & consulting 5/2/2 9. Healthcare & family life (healthy) (10%*) 10. Education & work life/Professions & entrepreneurship (wise) (9%*) 3/3/1 C. Systems that focus on human governance - security and opportunity (~15%*) 0/0/0 11. Cities & security for families and professionals (property tax) 1/2/2 12. States/regions & commercial development opportunities/investments (sales tax) 0/19/0 13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax) Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities “61 Service Design 2010 (Japan) / 75 Service Marketing 2010 (Portugal)/78 Service-Oriented Computing 2010 (US)”15 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 16. Sciences underlying HSSE Service Science Transdiscipline Foundations Disciplines Professions Phenomena: Run Past Present FutureValue-Cocreation Operators & Maintain Historical Studies: Future Studies: Research Anthrop, Economics & Law Stakeholders & Resources & Design & Mgmt of Innovation Transform Challenges Measures Access Rights Consultants Managers HumantesSocialScience Arts-Decision Sciences Customer & Quality People & PA Concepts & Marketing Psychology, Design Innovate Questions Behavioral Sciences Cognitive Sciences Scientists & Designers Provider & Productivity Technology & OO Tools & Operations Research & Mgmnt Indust. & Systems Engineering Work & Job Category Methods Management Sciences Engineering Sciences Evolution Authority & Compliance Information & SA Governance & Policymaking Management of Info Systems Political Sciences Computer & Info Sciences Rule Innovations Tech Innovations Competitors & Sust. Innov. Organizations & LC Strategy/Game Theory Project Management Contracts Learning Sciences Organization Science From: Spohrer, J. & Maglio, P. P. (2009). Service science: Toward a smarter planet. In W. Karwowski & G. Salvendy (Eds.), Introduction to service engineering. NY: Wiley. 16 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 17. Service Science and Policymaking  EN: FN(PRW) -> {RE} – Entities – Frameworks – Problems – Recommendations From: Spohrer, J, P Piciocchi, CBassano (2012). Three Frameworks for Service Research: Exploring Multilevel Governance in Nested, Networked Systems. Service Science 4:147-16017 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 18. Four measures  Innovativeness  Equity  Sustainability  Resiliency18 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 19. Service Science: Conceptual Framework Ecology (Populations & Diversity) Entities Interactions Outcomes (Service Systems, both (Service Networks, (Value Changes, bothIndividuals & Institutions) link, nest, merge, divide) beneficial and non-beneficial) Identity Value Proposition Governance Mechanism Reputation (Aspirations & Lifecycle/ (Offers & Reconfigurations/ (Rules & Constraints/ (Opportunities & Variety/ History) Incentives, Penalties & Risks) Incentives, Penalties & Risks) History) Access Rights Measures (Relationships of Entities) (Rankings of Entities) lose-win win-win prefer sustainable lose-lose win-lose non-zero-sum Resources Stakeholders outcomes, (Competences, Roles in Processes, (Processes of Valuing, i.e., win-win Specialized, Integrated/Holistic) Perspectives, Engagement)  Resources: People, Organizations, Technology, Shared Information  Resources: Individuals, Institutions, Infrastructure, Information  Stakeholders: Customers, Providers, Authorities, Competitors  Measures: Quality, Productivity, Compliance, Sustainable Innovation  Access Rights: Own, Lease, Shared, Privileged Spohrer, JC (2011) On looking into Vargo and Luschs concept of generic actors in markets, or “Its all B2B …and beyond!” Industrial Marketing Management, 40(2), 199–201. 19 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 20. Specialization has benefits Adam Smith: David Ricardo: Division of Labor Comparative Advantage20 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 21. Technology has a cost  “The burden of knowledge” Cesar Hidalgo: Societal Knowledge21 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 22. ~250 years of infrastructure transformations Installation Crash Deployment Irruption Frenzy Synergy Maturity • Formation of Mfg. industry 1 The Industrial 1771 Panic • Repeal of Corn Laws 1829 Revolution 1797 opening trade • Standards on gauge, time Age of Steam Panic 2 and Railways 1829 1847 • Catalog sales companies 1873 • Economies of scale Age of Steel, Depressio • Urban development 3 Electricity 1875 n • Support for interventionism 1920 1893 and Heavy Engineering • Build-out of Interstate Age of Oil, Crash 4 Automobiles 1908 1929 highways 1974 • IMF, World Bank, BIS and Mass Production Coming period of Age of Information Credit Crisis 5 and 1971 2008 Institutional Adjustment and Production Capital Telecommunications Source: Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages; (Edward Elar Publishers, 2003).22 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 23. ~100 years of US job transformations Source: US Bureau of Economic Analysis; McKinsey Global Institute Analysis23 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 24. We need better frameworks, theories, and models of… Four I’s Cultural Information – Infrastructure (Quality-of-Life Measures) – Individuals – Institutions – Information Individuals Institutions Four Measures (Skills) (Rules, Jobs) – Innovativeness – Equity – Sustainability Societal Infrastructure – Resiliency (Technologies & Environment)24 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 25. 25 IBM University Programs worldwide, accelerating regional development (IBM UPward) © 2012 BM Corporation
  • 26. 26 IBM GMU External Relations 2012
  • 27. Cities: land-population-energy-carbon Carlo Ratti: Senseable Cities27 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 28. City challenge: buildings and transportation Ryan Chin: Smart Cities28 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 29. Resiliency: Capability to rebuild (and recycle) rapidly China Broad Group: 30 Stories in 15 Days29 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 30. Self-driving cars Steve Mahan: Test “Driver”30 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 31. Manufacturing as a local recycling & assembly service Ryan Chin: Urban Mobility31 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 32. Advanced Product-Service Systems: Cirque Du Soleilhttp://www.youtube.com/watch?v=nd5WGLWNllA32 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 33. University: Four Missions Nation Knowledge State/Province – 1. Transfer (Teaching) City/Metro For-profits U-BEE – 2. Creation (Research) Job Creator/Sustainer – 3. Application (Benefits) Cultural & University Hospital Medical Conference College Research • Commerce/Entrepreneurship Hotels K-12 • Governance/Policymaking Worker Family – 4. Re-Integration (Challenge) Non-profits (professional) (household) • Innovativeness, Equity • Sustainability, Resilience Nested, Networked Holistic Service Systems – Flows Third Mission (Apply to Create Value) – Development is about U-BEEs = – Governance University-Based Entrepreneurial Ecosystems 33 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 34. Nations compete and cooperate: Universities important% WW GDP and % WW Top-500-Universities (2009 Data) 9 Japan 8 7 y = 0,7489x + 0,3534 R² = 0,719 China 6 Germany 5 France 4 United Kingdom Italy % G D o b P a g l 3 Russia Brazil Spain Canada 2 India Mexico South Korea Australia Turkey Netherlands 1 Sweden 0 0 1 2 3 4 5 6 7 8 9 % top 500 universities34 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 35. What are the benefits of more education? Of higher skills? …But it can be costly, American student loan debt is over $900M35 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 36. ~30 years of skill transformations: depth & breadth 15 10 Expert Thinking 5 Complex Communication 0 Routine Manual Non-routine Manual -5 Routine Cognitive -10 1969 1974 1979 1984 1989 1994 1999 Levy, F, & Murnane, R. J. (2004). The New Division of Labor: How Computers Are Creating the Next Job Market. Princeton University Press.36 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 37. T-shaped professionalsdepth & breadth Many cultures Many disciplines Many systems (understanding & communications) BREADTH Deep in one discipline Deep in one system Deep in one culture DEPTH (analytic thinking & problem solving)3737 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 38. Systems-Disciplines Framework: Depth & Breadth systems Systems that focus on flows of things Systems that support people’s activities Systems that govern transportation & ICT & retail & healthcare food & education city state nation disciplines supply chain water & energy products & electricity cloud building & hospitality banking & family &work secure scale laws waste construction & finance behavioral sciences Customerstakeholders e.g., marketing Provider management sciences e.g., operations Observe Stakeholders (As-Is) political sciences Authority e.g., public policy learning sciences Competitors e.g., game theory and strategy cognitive sciences People e.g., psychologyresources system sciences Technology e.g., industrial eng. information sciences Observe Resource Access (As-Is) Information e.g., computer sci organization sciences Organizations e.g., knowledge mgmt History social scienceschange e.g., econ & law (Data Analytics) decision sciences Imagine Possibilities (Has-Been & Might-Become) Future e.g., stats & design (Roadmap) run professions Run e.g., knowledge worker Transformvalue (Copy) transform professions e.g., consultant Realize Value (To-Be) Innovate innovate professions (Invent) e.g., entrepreneur 38 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 39. Working with universities-cities worldwide A long term investments to develop talent & skillsGovernment Global Placements & Collaboration withPartnerships Mentoring Universities Transferring knowledge and IBM works with 5,000 universitiesBy helping governments to and 10,000 faculties around theestablish new national expertise to the growth markets is critical. One of the ways we do this globe. We have joint initiativesresearch facilities, we are and investments with universitieshelping to create new is to move experts into the market to in Vietnam, Malaysia, India,industries, helping to develop coach and train local teams. Russia, Brazil, Bulgaria, Egypt,long terms skills curriculums China and Africa to encouragelike SSME. the training of skills required. 39 IBM GMU External Relations 2012
  • 40. We Are All Part Of Nested, Networked Service Systems Matryoska dolls: Origin Japanese40 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 41. I am nested in at least 10 systemsLevel AKA ~No. People ~No. Entities Example0. Individual Person 1 10,000,000,000 Jim1. Family Household 10 1,000,000,000 Spohrer’s2.Neighborhood Street 100 100,000,000 Kensington3. Community Block 1000 10,000,000 Bird Land4. Urban-Zone District 10,000 1,000,000 SC Unified5. Urban-Center City 100,0000 100,000 Santa Clara6.Metro-Region County 1,000,000 10,000 SC County7. State Province 10,000,000 1,000 CA8. Nation Country 100,000,000 100 USA9. Continent Union 1,000,000,000 10 NAFTA10. Planet World 10,000,000,000 1 UN41 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 42. A Framework for Global Civil Society  Daniel Patrick Moynihan said nearly 50 years ago: "If you want to build a world class city, build a great university and wait 200 years." His insight is true today – except yesterdays 200 years has become twenty. More than ever, universities will generate and sustain the world’s idea capitals and, as vital creators, incubators, connectors, and channels of thought and understanding, they will provide a framework for global civil society. – John Sexton, President NYU42 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 43. AHFE-HSSE 2012: Thank-you!43 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 44. ~14B Evolution of Natural Systems & Service Systems ~10KBig Bang Cities (Natural Unraveling the mystery of evolving hierarchical-complexity in new populations… (Human-Made Time World) To discover the world’s architectures and mechanisms for computing non-zero-sum World) writing (symbols and scribes, stored memory and knowledge) written laws ECOLOGY (governance and stored control) sun (energy) money earth (governed (molecules & transportable valuestored energy) stored value, “economic energy”) bacteria(single-cell life) bees (social sponges transistor division-of-labor)(multi-cell life) (routine cognitive work) universities (knowledge workersclams (neurons) printing press (books 44 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporationtrilobites (brains) 200M 60 steam engine (work)
  • 45. Co-Evolution (Michael Gallis & Associates) http://www.scribd.com/doc/46259459/Co-Evolution45 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 46. Visit IBM Almaden Research Center, San Jose, CA Upcoming Conferences – July 2012 • ISSS San Jose • HSSE San Francisco More Information – Blog • www.service-science.info – Twitter • @JimSpohrer – Presentations • www.slideshare.net/spohrer – Email • spohrer@us.ibm.com 46 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 47. Thank-You! Questions? “Instrumented, Interconnected, Intelligent – Let’s build a Smarter Planet.” – IBM “If we are going to build a smarter planet, let’s start by building smarter cities” – CityForward.org “Universities are major employers in cities and key to urban sustainability.” – Coalition of USU “Cities learning from cities learning from cities.” – Fundacion Metropoli “The future is already here… It is just not evenly distributed.” – Gibson “The best way to predict the future is to create it/invent it.” – Moliere/Kay “Real-world problems may not/refuse to respect discipline boundaries.” – Popper/Spohrer “Today’s problems may come from yesterday’s solutions.” – Senge “History is a race between education and catastrophe.” – H.G. Wells “The future is born in universities.” – Kurilov “Think global, act local.” – GeddesDr. James (“Jim”) C. SpohrerInnovation Champion &Director, IBM University Programs & open worldwide entrepreneurship research (IBM UPower) WWspohrer@us.ibm.com 47 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 48. IBM’s Leadership Changes IBM has 426,000 employees worldwide 2011 Financials 22% of IBM’s revenue  Revenue - $ 106.9B in Growth Market  Net Income - $ 15.9B countries; growing at 11% in 2011  EPS - $ 13.44  Net Cash - $16.6B More than 40% of IBM’s workforce conducts business away from an office 55% of IBM’s WorkforceIBM operates in 170 is New to the company incountries around the globe the last 5 years Number 1 in patent generation for 19100 Years of Business consecutive years ;& Innovation in 2011 6,180 US patents awarded in 2011 The Smartest Machine On Earth 9 time winner of the 5 Nobel President’s National Laureates Medal of Technology & Innovation - latest “Let’s Build a Smarter award for Blue Gene Planet" Supercomputer 48 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 49. Service systems entities learn to apply knowledge Learning To Apply Knowledge Do It Invent It Exploitation Exploration Run Transform Innovate Operations L Internal Incremental Maintenance Copy It External Radical Insurance Interaction Super-Radical March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87. Sanford, L.S. (2006) Let go to grow: Escaping the commodity trap. Prentice Hall. New York, NY.49 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 50. Service Science: Conceptual Framework Ecology (Populations & Diversity) Entities Interactions Outcomes (Service Systems, both (Service Networks, (Value Changes, bothIndividuals & Institutions) link, nest, merge, divide) beneficial and non-beneficial) Identity Value Proposition Governance Mechanism Reputation (Aspirations & Lifecycle/ (Offers & Reconfigurations/ (Rules & Constraints/ (Opportunities & Variety/ History) Incentives, Penalties & Risks) Incentives, Penalties & Risks) History) Access Rights Measures (Relationships of Entities) (Rankings of Entities) lose-win win-win prefer sustainable lose-lose win-lose non-zero-sum Resources Stakeholders outcomes, (Competences, Roles in Processes, (Processes of Valuing, i.e., win-win Specialized, Integrated/Holistic) Perspectives, Engagement)  Resources: Individuals, Institutions, Infrastructure, Information  Resources: People, Organizations, Technology, Information  Stakeholders: Customers, Providers, Authorities, Competitors  Measures: Quality, Productivity, Compliance, Sustainable Innovation  Access Rights: Own, Lease, Shared, Privileged Spohrer, JC (2011) On looking into Vargo and Luschs concept of generic actors in markets, or “Its all B2B …and beyond!” Industrial Marketing Management, 40(2), 199–201. 50 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 51. Service Systems Thinking: ABC’s Example Provider: College (A) A B Example Target: Student (C) Discuss: Who is the Customer (B)? A. Service Provider Forms of Service Relationship B. Service Customer - Student? They benefit… • Individual (A & B co-create value) • Individual - Parents? They often pay… • Institution • Institution • Public or Private - Future Employers? They benefit… • Public or Private - Professional Associations? Forms of Service Interventions - Government, Society? (A on C, B on C) Forms of Responsibility Relationship (A on C) C Forms of Ownership Relationship (B on C) C. Service Target: The reality to be transformed or operated on by A, for the sake of B • Individuals or people, dimensions of • Institutions or business and societal organizations, organizational (role configuration) dimensions of • Infrastructure/Product/Technology/Environment, “Service is the application of physical dimensions of • Information or Knowledge, symbolic dimensions competence for the benefit of another entity.” Spohrer, J., Maglio, P. P., Bailey, J. & Gruhl, D. (2007). Steps Vargo, S. L. & Lusch, R. F. (2004). Evolving to a new toward a science of service systems. Computer, 40, 71-77. dominant logic for marketing. Journal of Marketing, 68, 1 – 17. From… Gadrey (2002), Pine & Gilmore (1998), Hill (1977)51 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 52. Service system entities configure four types of resources Rights No-Rights  First foundational premise of 2. Technology/ • People/ service science: Physical Environment Individuals – Infrastructure Service system entities dynamically configure four types of resources 4. Shared – Resources are the building Not-Physical 3. Organizations/ Information/ blocks of entity Institutions Symbolic architectures Knowledge  Named resources are: – Physical or Formal service systems can contract to configure resources/apply competence – Not-Physical Informal service systems can promise to configure resources/apply competence – Physicist resolve disputes Trends & Countertrends (Balance Chaos & Order):  Named resources have: (Promise) Informal <> Formal (Contract) – Rights or (Relationships & Attention) Social <> Economic (Money & Capacity) – No Rights (Power) Political <> Legal (Rules) – Judges resolve disputes (Evolved) Natural <> Artificial (Designed) (Creativity) Cognitive Labor <> Information Technology (Routine) (Dance) Physical Labor <> Mechanical Technology (Routine)Spohrer, J & Maglio, P. P. (2009) (Relationships) Social Labor <> Transaction Processing (Routine)Service Science: Toward a Smarter Planet. (Atoms) Transportation <> Communication (Bits)In Introduction to Service Engineering. (Tacit) Qualitative <> Quantitative (Explicit)Editors Karwowski & Salvendy. Wiley. Hoboken, NJ.. (Secret) Private <> Public (Shared) (Anxiety-Risk) Challenge <> Routine (Boredom-Certainty) (Mystery) Unknown <> Known (Justified True Belief)52 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 53. Service system entities calculate value from multiple stakeholderperspectives Value propositions coordinate & motivate resource access  Second foundational premise of service science Stakeholder Measure Pricing Basic Value Perspective Impacted Decision Questions Proposition – Service system entities calculate (the players) Reasoning value from multiple stakeholder perspectives – Value propositions are the building 1.Customer Quality Value Should we? Model of customer: Do blocks of service networks (Revenue) Based (offer it) customers want it? Is there a market? How large? Growth rate?  A value propositions can be viewed as a request from one service system to another to run an algorithm (the value Productivity Cost Model of self: Does it play to 2.Provider Can we? proposition) from the perspectives of (Profit, Mission, Plus our strengths? Can we deliver (deliver it) multiple stakeholders according to Continuous it profitably to customers? culturally determined value principles. Improvement, Can we continue to improve? Sustainability)  The four primary stakeholder perspectives are: customer, provider, 3.Authority Compliance Regulated May we? Model of authority: Is it legal? authority, and competitor (Taxes and (offer and Does it compromise our Fines, Quality integrity in any way? Does it – Citizens: special customers deliver it) of Life) create a moral hazard? – Entrepreneurs: special providers – Parents: special authority – 4.Competitor Sustainable Strategic Will we? Model of competitor: Does it Criminals: special competitors Innovation (invest to put us ahead? Can we stay (Substitute) (Market make it so) ahead? Does it differentiate share) us from the competition? Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..53 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 54. Service system entities reconfigure access rights to resources by mutually agreed to value propositions  Third foundational premise of service Competitor Provider Customer Authority science S P C A – Service system entities reconfigure access rights to resources by mutually agreed to value propositions (substitute) OO OO – Access rights are the building blocks of LC LC the service ecology (culture and information) SA SA  Access rights PA PA value-proposition – Access to resources that are change-experience owned outright (i.e., property) dynamic-configurations – Access to resource that are time leased/contracted for (i.e., rental car, home ownership via mortgage, insurance policies, etc.) – Shared access (i.e., roads, web service = value-cocreation information, air, etc.) B2B B2C – Privileged access (i.e., personal thoughts, inalienable kinship B2G relationships, etc.) G2C provider resources G2B customer resources Owned Outright G2G Owned Outright C2C Leased/Contract C2B Leased/ContractSpohrer, J & Maglio, P. P. (2009)Service Science: Toward a Smarter Planet. Shared Access C2G Shared AccessIn Introduction to Service Engineering. Privileged Access *** Privileged AccessEditors Karwowski & Salvendy. Wiley. Hoboken, NJ..54 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 55. Service system entities interact to create ten types of outcomes ISPAR descriptive model  Four possible outcomes from a two player game lose-win win-win Win (coercion) (value-cocreation) Provider lose-lose win-lose Lose (co-destruction) (loss-lead) Lose Win Customer  ISPAR generalizes to ten possible outcomes – win-win: 1,2,3 – lose-lose: 5,6, 7, maybe 4,8,10 – lose-win: 9, maybe 8, 10 – win-lose: maybe 4Maglio PP, SL Vargo, N Caswell, J Spohrer: (2009) The service system is the basic abstraction of service science. Inf. Syst. E-Business Management 7(4): 395-406 (2009)55 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 56. Service system entities learn to systematically exploit technology:Technology can perform routine manual, cognitive, transactional work “Try to Learning Systems (“Choice & Change”) “Double operate monetize, inside internal win the Exploitation Exploration (James March) (James March) and ‘sell’ to comfort external” zone” Run/Practice-Reduce Transform/Follow Innovate/Lead (IBM) (IBM) (IBM) Operations Costs L Internal Incremental “To be the best, Maintenance Costs learn from External Radical the rest” Incidence Planning & Interactions Super-Radical Response Costs (Insure) March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87. Sanford, L.S. (2006) Let go to grow: Escaping the commodity trap. Prentice Hall. New York, NY.56 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 57. Service system entities are physical-symbol systems  Service is value cocreation.  Service system entities reason about value.  Value cocreation is a kind of joint activity.  Joint activity depends on communication and grounding.  Reasoning about value and communication are (often) effective symbolic processes. Newell, A (1980) Physical symbol systems, Cognitive Science, 4, 135-183. Newell, A & HA Simon(1976). Computer science as empirical inquiry: symbols and search. Communications of the ACM, 19, 113-126.57 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 58. Summary Rights No-Rights • People/ 2. Technology/ Physical Individuals Infrastructure 3. Organizations/ 4.. Shared Not-Physical Institutions Information 1. Dynamically configure resources (4 I’s) 4. Ten types of outcomes (ISPAR) Stakeholder Measure Pricing Questions Reasoning Perspective Impacted 1.Customer Quality Value Should we? Model of customer: Do Based customers want it? 2.Provider Productivity Cost Can we? Model of self: Does it Plus play to our strengths? 3.Authority Compliance Regulated May we? Model of authority: Is it legal? 4.Competitor/ Sustainable Strategic Will we? Model of competitor: Innovation Does it put us ahead? Substitutes 2. Value from stakeholder perspectives 5. Exploit information & technology S P C A 3. Reconfigure access rights 6. Physical-Symbol Systems Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..58 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 59. Service Management:Learning More Operations, Strategy,About Service Systems… and Information Technology  Fitzsimmons & Fitzsimmons By Fitzsimmons and – Graduate Students Fitzsimmons, UTexas – Schools of Engineering & Businesses  Teboul – Undergraduates – Schools of Business & Social Sciences Service Is Front Stage: – Busy execs (4 hour read) Positioning services for  Ricketts value advantage – Practitioners By James Teboul, INSEAD – Manufacturers In Transition  And 200 other books… Reaching the Goal: – Zeithaml, Bitner, Gremler; Gronross, Chase, Jacobs, Aquilano; Davis, Heineke; Heskett, Sasser, Schlesingher; Sampson; Lovelock, Wirtz, Chew; Alter; How Managers Improve Baldwin, Clark; Beinhocker; Berry; Bryson, Daniels, Warf; Checkland, Holwell; Cooper,Edgett; Hopp, Spearman; Womack, Jones; Johnston; Heizer, Render; a Services Business Milgrom, Roberts; Norman; Pine, Gilmore; Sterman; Weinberg; Woods, Degramo; Wooldridge; Wright; etc. Using Goldratt’s  URL: http://www.cob.sjsu.edu/ssme/refmenu.asp Theory of Constraints  More Textbooks: By John Ricketts, IBM http://service-science.info/archives/193159 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 60.  Our planet is a complex system-of-systemsOur planet is a complex, dynamic, highly interconnected$54 Trillion system-of-systems (OECD-based analysis) This chart shows ‘systems‘ (not ‘industries‘) Communication Transportation $ 3.96 Tn $ 6.95 Tn Education $ 1.36 Tn Water $ 0.13 Tn Leisure / Recreation / Electricity Clothing $ 2.94 Tn $ 7.80 Tn Global system-of-systems $54 Trillion (100% of WW 2008 GDP) Healthcare $ 4.27 Tn Infrastructure Legend for system inputs $ 12.54 Tn Note: Same Industry 1. Size of bubbles represents Business Support systems’ economic values IT Systems 2. Arrows represent the strength of Energy Resources systems’ interaction Machinery Finance Food Govt. & Safety 1 Tn Materials Source: IBV analysis based on OECD $ 4.58 Tn $ 5.21 Tn $ 4.89 Tn Trade60 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 61.  We now have the capabilities to manage a system-of-systems planetEconomists estimate, that all systems carry inefficienciesof up to $15 Tn, of which $4 Tn could be eliminated This chart shows ‘systems‘ (not ‘industries‘) Analysis of inefficiencies in the 40% planet‘s system-of-systems Healthcare Global economic value of Improvement potential as % of system inefficiency 4,270 35% Building & Transport 34% System-of- $54 Trillion Infrastructure Education systems 100% of WW 2008 GDP 12,540 1,360 Financial Electricity 42% 30% 2,940 4,580 Inefficiencies $15 Trillion 28% of WW 2008 Food & Water GDP 4,890 25% Communication Government & Safety Improvement $4 Trillion 3,960 5,210 potential 7% of WW 2008 GDP Transportation (Goods & Passenger) 6,950 20% Leisure / Recreation / Note: Size of the bubble indicate Clothing absolute value of the system in USD 15% 7,800 Billions How to read the chart: 15% 20% 25% 30% 35% 40% 45% For example, the Healthcare system‘s System inefficiency as % of total value is $4,270B. It carries an estimated inefficiency of 42%. From that level of 42% economic value inefficiency, economists estimate that ~34% can be eliminated (= 34% x 42%). Source: IBM economists survey 2009; n= 48061 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 62. The New Normal: Smarter Systems Service Systems: Stakeholders & Resources 1. People 2. Technology 3. Shared Information 4. Organizations Computational System connected by win-win value propositions Smarter Technology Smarter Buildings, Universities, Cities Requires investment roadmap Requires investment roadmap62 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 63. Normann: Reframing Business  Reframing Business: When the Map Changes the Landscape  Richard Normann  Value-Creating Systems63 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 64. Deacon: Incomplete Nature  Incomplete Nature: How Mind Emerged From Matter  Terrence W. Deacon  Thermodynamics -> Teleodynamics (purpose- driven system dynamics)  Purpose = map64 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 65. Knowledge: Individuals & Society Herbert Simon: Ben Jones: Bounded Rationality Burden of Knowledge65 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 66. The limits of our individual knowledge66 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 67. Sustainability/Resilience & Innovation: Local-p global-i supply chains World as System of Systems World (light blue - largest) Nations (green - large) States (dark blue - medium) Cities (yellow - small) Universities (red - smallest) Cities as System of Systems Developed Market -Transportation & Supply Chain Nations -Water & Waste Recycling (> $20K GDP/Capita) -Food & Products ((Nano) -Energy & Electricity -Information/ICT & Cloud (Info) -Buildings & Construction Emerging Market -Retail & Hospitality/Media & Entertainment Nations -Banking & Finance (< $20K GDP/Capita) -Healthcare & Family (Bio) -Education & Professions (Cogno) -Government (City, State, Nation) Nations: Innovation Opportunities - GDP/Capita (level and growth rate) - Energy/Capita (fossil and renewable)67 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 68. Universities Worldwide Accelerating Regional Development “When we combined the impact of Harvard’s direct spending on payroll, purchasing and construction – the indirect impact of University spending – and the direct and indirect impact of off-campus spending by Harvard students – we can estimate that Harvard directly and indirectly accounted for nearly $4.8 billion in economic activity in the Boston area in fiscal year 2008, and more than 44,000 jobs.”68 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 69. Regional Competitiveness and U-BEEs:Where imagined possible worlds become observable real worldshttp://www.service-science.info/archives/1056Innovations NationUniversities/ “The future is already State/Province here (at universities),Regions City/RegionCalculus (Cambridge/UK) For-profits it is just not evenlyPhysics (Cambridge/UK) U-BEEComputer Science (Columbia/NY) distributed.”Microsoft (Harvard/WA) Job Creator/SustainerYahoo (Stanford/CA) Hospital Cultural & UniversityGoogle (Stanford/CA) Medical Conference CollegeFacebook (Harvard/CA) Research Hotels K-12 “The best way to Non-profits Worker (professional) Family (household) predict the future is to (inspire the next generation of students to) build it better.” U-BEEs = University-Based Entrepreneurial Ecosystems, City Within City 69 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 70. What is the future? We can imagine many possibilities… Kurzweilai.net70 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 71. Imagining quality-of-life innovations…71 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 72. A Game of Life: Essentials Game = board with squares & rules – Infrastructure both Environmental and Technological • PS (Physical Systems - Environment) – Natural Endowment (hidden & observable information) • PSS (Physical Symbol Systems – Environment & Technology) – Biological PSS (observable information – DNA, RNA, proteins, etc.) – Technological PSS (observable information – states of system, bits, etc.) Life = multiple generations of entities – Entities = SSE (Service System Entities) • Individuals with Competencies & Life-Spans – Competencies (vary with age) – Life-Spans (vary with stage) • Institutions with Roles & Rules Rights No-Rights 2. Technology/ – Roles (Competency-Levels and Pay-Levels) 1. People/ Environmental Physical Individuals – Rules (Compliance-Levels and Tax-Levels) Infrastructure 3. Organizations/ 4. Shared Not-Physical Institutions Information 1. Dynamically configure resources (4 I’s)72 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 73. Life = Multiple Generations of Entities (200 years = 10 generations x 20 years)Pedagogy: Ten Social-Technological-Economic-Environmental-Political (STEEP) StagesThought Experiment: Binary-Board-Space (Rule: Toggles Each Generation) 1. Hunter-Gatherer Knowledge-Value Economy 1 - 2K population (20 people/sq mile * 100 sq miles) 2. Transition Hunter-Gatherer Knowledge-Value Economy 2 - 4K population (40 people/sq mile * 100 sq miles) 10 miles 3. Agricultural Knowledge-Value Economy 1 - 8K population (80 people/sq mile * 100 sq miles) 4. Transition Agricultural Knowledge-Value Economy 2 In Use - 16K population (160 people/sq mile * 100 sq miles) Rule: 5. Manufacturing Knowledge-Value Economy 1 Toggles Each Generation - 32K population (320 people/sq mile * 100 sq miles) 6. Transition Manufacturing Knowledge-Value Economy 2 Recycle - 64K population (640 people/sq mile * 100 sq miles) 7. Service-Information Knowledge-Value Economy 1 - 128K population (1,280 people/sq mile * 100 sq miles) 8. Transition Service-Information Knowledge-Value Economy 2 - 256K population (2,560 people/sq mile * 100 sq miles) 9. Sustainable-Innovation Knowledge-Value Economy 1 - 512K population (5,120 people/sq mile * 100 sq miles) 10. Transition Sustainable-Innovation Knowledge-Value Economy 2 - 1024K population (10,240 people/sq mile * 100 sq miles)  And beyond!73 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 74. Game = Board with Squares & RulesExample: Possible STEEP Stages 9 & 10 (infrastructure, sustainable-innovation cities)  Imagine nested holistic product-service-systems entities… Occupied – 10 Continents/planet (In Use) 11 Systems Toggle each generation – 20 year cycle – 10 Nations/continent – 10 States/nation transportation – 10 Cities/state water – 4 Sectors/city (interconnect to others) food/products – 11 Systems/sector energy  Rules: Board-space toggles each generation ICT – 20 years/generation buildings/family – New infrastructure/generation R&H/M&E/C&S Sector 1 Sector 2 finance city state  World: Further Pedagogical Purposes interconnect interconnect – “World Simulator” benchmarking health – Search to accelerate learning education Sector 3 Sector 4 • 10,000 city experiments/generation governance nation continent • Low skill/raw materials > Hi-talent/tech interconnect interconnect – Each generation new outcomes • Talents (skills & jobs) Recycling • Technologies (recycle & rebuild) (De-construction & • Investments (script & performance) Re-construction) 74 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 75. Entities = Life-Cycle ScriptExample: Possible STEEP Stages 9 & 10 (individuals, multiple generations of entities)  Children – Age 0-20 – (Local & Global) Grow, Learn, & Have Fun  Parents – Age 20-40 (offspring 2) – (Next Local) Reproduce, Raise Children, & Build New “City” SET Stage  Grand-Parents – Age 40-60 (offspring 4) – (Local) Run the “City” You Built & Connect with Family  Great-Grand-Parents – Age 60-80 (offspring 8) – (Global) Travel the World, Enjoy Experiences, & Share Ideas  Great-Great-Grand-Parents – Age 80-100 (offspring 16) – (Local) Return, Reconnect, and Document History & Future Plans  Great-Great-Great-Grand-Parents – Age 100-120 (offspring 32) – (Local & Global) Celebrate, Tell Stories, Depart & Explore Further Realms75 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  • 76. The Game of Life: Service Science Framework  The Game Board: A configuration of PS (Physical Systems), with interspersed PSS (Physical Symbol Systems) and SSE (Service System Entities). – The SSE are PSS are PS – The infrastructure is PS + PSS • The PS have hidden information (state) • The PSS have observable information (state and read-write) – The SSE use information to co-create value • World model – information about the world (The Game Board) • Self model – information about self (SSE) • The SSE have a beginning and an end (life-cycle) • The SSE judge quality-of-life across their life-cycle – The game is each generation of SSE try to improve quality-of-life, by improving the capabilities of the infrastructure (less waste, more support for SSE activities) and the capabilities of the SSE to co-create value (an SSE activity) – The starting game board consists of PS with a few PSS, and the goal is to see how quickly and with how little energy and with how few types and tokens of PS, the PSS can become SSE and reconstruct a high level infrastructure and high quality of life and continuously improve at a sustainable pace. • Processes of valuing are based on the above76 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation